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:
Chapter1: Financial Statements And Business Decisions
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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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