In January 2021, Tawatinaw Group paid $650,000 for 60,000 shares of Neerlandia Inc.,giving Tawatinaw a 30% ownership interest in Neerlandia. On December 31, 2021,Neerlandia paid a $95,000 cash dividend and reported profit of $575,000. Neerlandia'sshares were trading at $13 per share on this day. Both Neerlandia and Tawatinaw havea December 31 year end. Tawatinaw is able to appoint one of Neerlandia's six boardmembers. Tawatinaw reports under ASPE.Instructions:a. Record the above transactions assuming Tawatinaw reports its investment inNeerlandia using the equity method.b. Determine the amounts to be reported on Tawatinaw's balance sheet andincome statement related to its investment in Neerlandia at December 31, 2021.C. Repeat parts a. and b. assuming Tawatinaw elects to report its investment inNeerlandia using the cost method.Round amounts to the nearest dollar. Show ALL calculations for full marks.

In January 2021, Tawatinaw Group paid $650,000 for 60,000 shares of Neerlandia Inc. giving Tawatinaw a 30% ownership interest in Neerlandia. On December 31, 2021, Neerlandia paid a $95,000 cash dividend and reported profit of $575,000. Neerlandia's shares were trading at $13 per share on this day. Both Neerlandia and Tawatinaw have a December 31 year end. Tawatinaw is able to appoint one of Neerlandia's six board members. Tawatinaw reports under ASPE.

In January 2021, Tawatinaw Group paid $650,000 for 60,000 shares of Neerlandia Inc. giving Tawatinaw a 30% ownership interest in Neerlandia. On December 31, 2021, Neerlandia paid a $95,000 cash dividend and reported profit of $575,000. Neerlandia's shares were trading at $13 per share on this day. Both Neerlandia and Tawatinaw have a December 31 year end. Tawatinaw is able to appoint one of Neerlandia's six board members. Tawatinaw reports under ASPE.

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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