Mainmont Industries uses the equity method to account for its long term equity investments from affiliates The following information from the financial statements of Mainmont refers to an investment in the securities of Tumbleweed Construction, a company 30 percent owned by Mainmont Mainmont neithe...

a Since Mainmont Industries owns 30 of Tumbleweed Construction 30 of Tumbleweed Constructions net in ...

Mainmont Industries uses the equity method to account for its long-term equity investments from affiliates. The following

Question:

Mainmont Industries uses the equity method to account for its long-term equity investments from affiliates. The following information from the of Mainmont refers to an investment in the securities of Tumbleweed Construction, a company 30 percent owned by Mainmont:

2017 2016 Long-term investments Equity income $29,000 $25,000 12,000 7,000

Mainmont neither purchased nor sold any equity securities during 2017.
a. How much net income did Tumbleweed Construction earn during 2017?
b. What was the dollar amount of the total dividend declared by Tumbleweed Construction during 2017?
c. Provide the journal entries recorded by Mainmont during 2017 with respect to its investment in Tumbleweed Construction.
d. Describe how this activity would be reported on Mainmont€™s statement of cash flows.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... 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...

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