James Company owns 50% of Stars Company's cumulative preference shares and 30% of its ordinary shares. Stars' shares outstanding at December 31, 2020 include 10,000,000 of 10% cumulative preference shares and 40,000,000 of ordinary shares. Stars reported profit of 8,000,000 for the year ended December 31, 2020. Stars declared and paid 1,500,000 preference share dividends during 2020. Stars paid no preference share dividends during 2019. How much is the total amount to be recognized by James Company in its 2020 profit or loss related to
James Company owns 50% of Stars Company's cumulative preference shares and 30% of its ordinary shares. Stars' shares outstanding at December 31, 2020 include 10,000,000 of 10% cumulative preference shares and 40,000,000 of ordinary shares. Stars reported profit of 8,000,000 for the year ended December 31, 2020. Stars declared and paid 1,500,000 preference share dividends during 2020. Stars paid no preference share dividends during 2019. How much is the total amount to be recognized by James Company in its 2020 profit or loss related to
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![James Company owns 50% of Stars Company's cumulative preference shares and 30% of its ordinary
shares. Stars' shares outstanding at December 31, 2020 include 10,000,000 of 10% cumulative
preference shares and 40,000,000 of ordinary shares.
Stars reported profit of 8,000,000 for the year ended December 31, 2020. Stars declared and paid
1,500,000 preference share dividends during 2020. Stars paid no preference share dividends during
2019.
How much is the total amount to be recognized by James Company in its 2020 profit or loss related to
these investments?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa6f2833e-0a6b-483a-9346-4b957e31ed76%2F43cad527-8874-40d6-a805-6ff27d9eae98%2Fotr1ibd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:James Company owns 50% of Stars Company's cumulative preference shares and 30% of its ordinary
shares. Stars' shares outstanding at December 31, 2020 include 10,000,000 of 10% cumulative
preference shares and 40,000,000 of ordinary shares.
Stars reported profit of 8,000,000 for the year ended December 31, 2020. Stars declared and paid
1,500,000 preference share dividends during 2020. Stars paid no preference share dividends during
2019.
How much is the total amount to be recognized by James Company in its 2020 profit or loss related to
these investments?
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