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Calculating income from investments in the middle of the year

Calculating income from investments in the middle of the year

FINANCIAL ACCOUNTING
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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Exercise 4 Calculating income from investments in the middle of the year Carr Corporation paid $600,000 for a 30% stake in D Corporation on July 1, 2011, when the carrying amount of the identifiable net assets of D Corporation equaled its fair value, as follows: Information related to (MDD) (in thousands): 31 December 2010 31 December 2011 Equity capital, 51 face value Retained earnings Total shareholders' equity 600$ 600$ 400 500 1000$ 1100$ 200$ Net profit (D) earned regularly during the year 2011 Dividends (D)4 year 2011 (paid 550,000 - the first of March and 50,000 - the first 100$ of September) Required: Calculate the income of the company (KAR) from the company (D) for the year 2011.
Transcribed Image Text:Exercise 4 Calculating income from investments in the middle of the year Carr Corporation paid $600,000 for a 30% stake in D Corporation on July 1, 2011, when the carrying amount of the identifiable net assets of D Corporation equaled its fair value, as follows: Information related to (MDD) (in thousands): 31 December 2010 31 December 2011 Equity capital, 51 face value Retained earnings Total shareholders' equity 600$ 600$ 400 500 1000$ 1100$ 200$ Net profit (D) earned regularly during the year 2011 Dividends (D)4 year 2011 (paid 550,000 - the first of March and 50,000 - the first 100$ of September) Required: Calculate the income of the company (KAR) from the company (D) for the year 2011.
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