At the beginning of the year, the Carolyn Brewery of Melbourne, Australia purchased a 25 percent ownership interest in Amber Pub of Brisbane, Australia. The investment cost $12 million. At year- end, Amber Pub declared and paid cash dividends to shareholders totaling $320,000, after reporting earnings of $2.0 million. A. Calculate the income statement effect of Carolyn's investment in Amber Pub as of year-end. B. Calculate the book value of Carolyn's equity investment in Amber Pub at year-end. C. Calculate the book value of Carolyn's equity investment in Amber Pub at year-end assuming that Down Under reported a loss of $1.2 million instead of a profit of $2.0 million and still paid its dividend of $320,000.

At the beginning of the year, the Carolyn Brewery of Melbourne, Australia purchased a 25 percent ownership interest in Amber Pub of Brisbane, Australia. The investment cost $12 million. At year- end, Amber Pub declared and paid cash dividends to shareholders totaling $320,000, after reporting earnings of $2.0 million. A. Calculate the income statement effect of Carolyn's investment in Amber Pub as of year-end. B. Calculate the book value of Carolyn's equity investment in Amber Pub at year-end. C. Calculate the book value of Carolyn's equity investment in Amber Pub at year-end assuming that Down Under reported a loss of $1.2 million instead of a profit of $2.0 million and still paid its dividend of $320,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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