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P2-19 Investments Carried at Fair Value and Equity Method Gant Company purchased 20 percent of the outstanding shares of Temp Company for $70,000 on January 1, 20X6. The following results are reported for Temp Company: Net Income Dividends Paid Fair Value of Shares Held by Gant: January 1 December 31 20X6 $40,000 15,000 a. Carries the investment at fair value. b. Uses the equity method 70,000 89,000 20X7 $35,000 30,000 89,000 86,000 20X8 $60,000 20,000 86,000 97,000 Required Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the fol- lowing options in accounting for its investment in Temp:

P2-19 Investments Carried at Fair Value and Equity Method Gant Company purchased 20 percent of the outstanding shares of Temp Company for $70,000 on January 1, 20X6. The following results are reported for Temp Company: Net Income Dividends Paid Fair Value of Shares Held by Gant: January 1 December 31 20X6 $40,000 15,000 a. Carries the investment at fair value. b. Uses the equity method 70,000 89,000 20X7 $35,000 30,000 89,000 86,000 20X8 $60,000 20,000 86,000 97,000 Required Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the fol- lowing options in accounting for its investment in Temp:

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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P2-19 Investments Carried at Fair Value and Equity Method Gant Company purchased 20 percent of the outstanding shares of Temp Company for $70,000 on January 1, 20X6. The following results are reported for Temp Company: Net Income Dividends Paid Fair Value of Shares Held by Gant: January 1 December 31 20X6 $40,000 15,000 a. Carries the investment at fair value. b. Uses the equity method 70,000 89,000 20X7 $35,000 30,000 89,000 86,000 20X8 $60,000 20,000 86,000 97,000 Required Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the fol- lowing options in accounting for its investment in Temp:
Transcribed Image Text:P2-19 Investments Carried at Fair Value and Equity Method Gant Company purchased 20 percent of the outstanding shares of Temp Company for $70,000 on January 1, 20X6. The following results are reported for Temp Company: Net Income Dividends Paid Fair Value of Shares Held by Gant: January 1 December 31 20X6 $40,000 15,000 a. Carries the investment at fair value. b. Uses the equity method 70,000 89,000 20X7 $35,000 30,000 89,000 86,000 20X8 $60,000 20,000 86,000 97,000 Required Determine the amounts reported by Gant as income from its investment in Temp for each year and the balance in Gant's investment in Temp at the end of each year assuming that Gant uses the fol- lowing options in accounting for its investment in Temp:
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