Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.2IP
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Question
An investor company purchased 65,000 of the 200,000 outstanding shares of the investee company's common stock for $347,000 on January 1, 2021. During 2021, the investee company declared dividends of $31,000 and reported earnings for the year of $249,000. If the investor company uses the equity method of accounting for its investment in the investee company, it should report Investment Income from the investee company for 2021 in the amount of $__________. (Do not round your answer for any part of the computation.)
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