On January 1, 20X5, John Co. invested in Mary Ltd as an associated company by purchasing 25%
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On January 1, 20X5, John Co. invested in Mary Ltd as an associated company by purchasing 25% of the outstanding shares of Mary at a cost of $275,000. Both firms have a fiscal year-end of December 31. On December 31, 20x4, the reported retained earnings of Mary is $22,000, and on December 31, 20x5, the reported retained earnings of Mary is $42,000. In 20x6, Mary has net income $35,000, and declared dividend $15,000. If John uses the equity method for recording its investment in Mary, what would be the balance of the "Investment in Mary" on December 31, 20X6?
Related Book For
Advanced Financial Accounting
ISBN: 978-0137030385
6th edition
Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay
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