Hot Ltd buys a 30 percent share in Chilli Ltd for $64 million. Total profit for the

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Hot Ltd buys a 30 percent share in Chilli Ltd for $64 million. Total profit for the year for Chilli Ltd is $44 million, and Hot Ltd receives $4 million in dividends from Mustard.

1. Using the cost method, what would be the revenue and investment accounts at year-end for this investment?

2. Using the equity method, what would be the revenue recognised for this investment during the year?

3. Using the equity method, what would be the year-end value of the investment in Chilli?

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Financial Accounting An Integrated Approach

ISBN: 9780170349680

6th Edition

Authors: Ken Trotman, Michael Gibbins, Elizabeth Carson

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Question Posted: Jan 25, 2024 05:00 AM

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Hot Ltd buys a 30 percent share in Chilli Ltd for $64 million. Total profit for the

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Financial Accounting An Integrated Approach

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