Using the data presented in BE12-8, determine the accounts and balances that would appear on the income statement at the end of the current year, and identify where those accounts are presented on that statement assuming
In BE 12.8
Chan Inc., a publicly traded company, purchased 20% of Dong Ltd.'s common shares for $225,000 on January 1. During the year, Dong reported net income of $350,000 and declared and paid dividends of $40,000. The investment's fair value at December 31 was $275,000, the company's year end.
(a) There is significant influence and the equity method is used,
(b) The investment is accounted for under the fair value through profit or loss model, and
(c) The investment is accounted for under the cost model.