Sydney Ltd purchased 20% of the shares in Melbourne Ltd on 1 July 2019 for $250,000. During the year Melbourne Ltd announced a net profit of $60,000 and declared and paid dividends of $20,000. If Sydney Ltd accounted for the investment in Melbourne Ltd using the cost method how much revenue would Sydney Ltd have recognised due to its investment in Melbourne Ltd for the year ending 30 June 2020.
Sydney Ltd purchased 20% of the shares in Melbourne Ltd on 1 July 2019 for $250,000. During the year Melbourne Ltd announced a net profit of $60,000 and declared and paid dividends of $20,000. If Sydney Ltd accounted for the investment in Melbourne Ltd using the cost method how much revenue would Sydney Ltd have recognised due to its investment in Melbourne Ltd for the year ending 30 June 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Sydney Ltd purchased 20% of the shares in Melbourne Ltd on 1 July 2019 for $250,000. During the year Melbourne Ltd announced a net
profit of $60,000 and declared and paid dividends of $20,000.
If Sydney Ltd accounted for the investment in Melbourne Ltd using the cost method how much revenue would Sydney Ltd have recognised
due to its investment in Melbourne Ltd for the year ending 30 June 2020.
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