At a total cost of $710,000, Abbott Corporation acquired 50,000 shares of Costello Corp common stock as a long term investment Abbott Corporation uses the equity method of accounting for this investment Costello Corp has 200,000 shares of common stock outstanding, including the shares acquired by A...

Date a b Particulars Investment Costello ...

At a total cost of $710,000, Abbott Corporation acquired 50,000 shares of Costello Corp. common stock as

Question:

At a total cost of $710,000, Abbott acquired 50,000 shares of Costello Corp. as a long-term investment. Abbott uses the equity method of accounting for this investment. Costello Corp. has 200,000 shares of outstanding, including the shares acquired by Abbott the entries by Abbott to record the following information:
(a) Costello Corp. reports net income of $1,280,000 for the current period.
(b) A cash of $1.40 per common share is paid by Costello Corp. during the current period.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...