Gant Company purchased 30 percent of the outstanding shares of Temp Company for $83,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 20x6 20X7 S 47,000 11,000 1. Carries the investment at fair value. 2. Uses the equity method. 83,000 102,000 20x8 $ 42,000 $ 56,000 26,000 16,000 102,000 99,000 99,000 110,000 Required: Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp:
Gant Company purchased 30 percent of the outstanding shares of Temp Company for $83,000 on January 1, 20X6. The following results are reported for Temp Company: Net income Dividends paid Fair value of shares held by Gant: January 1 December 31 20x6 20X7 S 47,000 11,000 1. Carries the investment at fair value. 2. Uses the equity method. 83,000 102,000 20x8 $ 42,000 $ 56,000 26,000 16,000 102,000 99,000 99,000 110,000 Required: Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its investment in Temp:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Dd.91.
Transcribed Image Text:Gant Company purchased 30 percent of the outstanding shares of Temp Company for $83,000 on January 1, 20X6. The
following results are reported for Temp Company:
Net income
Dividends paid
Fair value of shares held by Gant:
January 1
December 31
20X6 20X7
$
47,000
1. Carries the investment at fair value.
2. Uses the equity method.
11,000
83,000
102,000
20X8
$ 42,000
26,000
102,000
99,000
$ 56,000
16,000
99,000
110,000
Required:
Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's
investment in Temp at the end of each year assuming that Gant uses the following options in accounting for its
investment in Temp:
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