On January 1, 2021, X Inc. purchased 25% of the voting shares of Y Inc. However, due to a system crash, the initial amount of consideration paid for this 25% has been lost. X uses the equity method. X has significant influence over Y. Calculate the Value of the initial purchase X Inc. paid for its 25% ownership (i.e. January 1, 2021), given the following information that you were able to find: Value of the Investment account in Y Inc. at the end of 2023 was $97,000 Y's net income and declared dividends for the following three years are as follows: Net Income (loss) Dividends 2021 $50,000 $20,000 2022 $70,000 $80,000 2023 $30,000 $60,000
On January 1, 2021, X Inc. purchased 25% of the voting shares of Y Inc. However, due to a system crash, the initial amount of consideration paid for this 25% has been lost. X uses the equity method. X has significant influence over Y. Calculate the Value of the initial purchase X Inc. paid for its 25% ownership (i.e. January 1, 2021), given the following information that you were able to find: Value of the Investment account in Y Inc. at the end of 2023 was $97,000 Y's net income and declared dividends for the following three years are as follows: Net Income (loss) Dividends 2021 $50,000 $20,000 2022 $70,000 $80,000 2023 $30,000 $60,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, X Inc. purchased 25% of the voting shares of Y Inc. However, due to a system crash, the initial amount of consideration paid for this 25% has been lost. X uses the equity method. X has significant influence over Y.
Calculate the Value of the initial purchase X Inc. paid for its 25% ownership (i.e. January 1, 2021), given the following information that you were able to find:
Value of the Investment account in Y Inc. at the end of 2023 was $97,000
Y's net income and declared dividends for the following three years are as follows:
|
|
Net Income (loss) |
Dividends |
|
2021 |
$50,000 |
$20,000 |
|
2022 |
$70,000 |
$80,000 |
|
2023 |
$30,000 |
$60,000 |
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