On January 1, 2019, Spring Co. purchased a 25% interest in Fall Inc. for $500,000. For the year ended December 31, 2019, Fall reported net income from operations of $65,000 and a loss from discontinue 10,000 (net of tax). Fall paid dividends of $11,500 on December 31, 2019. Assume that Spring uses the equity method to account for its investment in Fall. Which of the following is the amount that would be reported on Spring's 2019 income statement relating to Fall? Multiple Choice Investment income of $13,750. Dividend revenue of $2,875. Investment income of $16,250 and investment loss, discontinued operations of $2,500. Investment income of $13.750 and investment loss, discontinued operations of $2.500.
On January 1, 2019, Spring Co. purchased a 25% interest in Fall Inc. for $500,000. For the year ended December 31, 2019, Fall reported net income from operations of $65,000 and a loss from discontinue 10,000 (net of tax). Fall paid dividends of $11,500 on December 31, 2019. Assume that Spring uses the equity method to account for its investment in Fall. Which of the following is the amount that would be reported on Spring's 2019 income statement relating to Fall? Multiple Choice Investment income of $13,750. Dividend revenue of $2,875. Investment income of $16,250 and investment loss, discontinued operations of $2,500. Investment income of $13.750 and investment loss, discontinued operations of $2.500.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 14RE
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Question
![On January 1, 2019, Spring Co. purchased a 25% interest in Fall Inc. for $500,000. For the year ended December 31, 2019, Fall reported net income from operations of $65,000 and a loss from discontinued operations of
$10,000 (net of tax). Fall paid dividends of $11,500 on December 31, 2019.
Assume that Spring uses the equity method to account for its investment in Fall. Which of the following is the amount that would be reported on Spring's 2019 income statement relating to Fall?
Multiple Choice
Investment income of $13,750.
Dividend revenue of $2,875.
Investment income of $16,250 and investment loss, discontinued operations of $2,500.
Investment income of $13,750 and investment loss, discontinued operations of $2,500.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe4b6eabf-fdcd-4e0b-9c46-652cc0cb6449%2Fab2f358f-1059-4790-b695-53507d460242%2Ff77gd4k_processed.png&w=3840&q=75)
Transcribed Image Text:On January 1, 2019, Spring Co. purchased a 25% interest in Fall Inc. for $500,000. For the year ended December 31, 2019, Fall reported net income from operations of $65,000 and a loss from discontinued operations of
$10,000 (net of tax). Fall paid dividends of $11,500 on December 31, 2019.
Assume that Spring uses the equity method to account for its investment in Fall. Which of the following is the amount that would be reported on Spring's 2019 income statement relating to Fall?
Multiple Choice
Investment income of $13,750.
Dividend revenue of $2,875.
Investment income of $16,250 and investment loss, discontinued operations of $2,500.
Investment income of $13,750 and investment loss, discontinued operations of $2,500.
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