What amount should Eduardo report as total revenue related to its investment in Letecia Company for the year ended December 31, 2021?
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Eduardo, a large entity, owns 50% and 20% of Letecia Corporation’s ordinary and preference shares, respectively. Letecia’s shares outstanding at December 31, 2021 follow:
Ordinary share, P5,000,000
10% non-cumulative
Letecia reported net income of P750,000 for the year ended December 31, 2021.
What amount should Eduardo report as total revenue related to its investment in Letecia Company for the year ended December 31, 2021?
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- Blanton Corporation purchased 15% of the outstanding shares of common stock of Worton Corporation as a long-term investment. Subsequently, Worton Corporation reported net income and declared and paid cash dividends. What journal entry would Blanton Corporation use to record the dividends it receives?On January 1, 2019, Blackpink Company purchased 50,000 shares of another entity for P3,600,000. On October 1, 2019, the entity received 50,000 stock rights from the investee. Each right entitled the shareholder to acquire one share for P80 for every 5 rights. The market price of the investee’s share was P100, December 1, 2019, the entity exercised all stock rights. How is the investment income upon exercise of rights?On January 1, 2021, an investor company acquired 25% of an investee company's common stock for $2,880, 000. As a result of this transaction, the investor can exert significant influence over the investee. During each year ended December 31, 2021 and 2022 the investee reported $576,000 of net income and $240,000 of dividends. On January 1, 2021, the book value of the investee's net assets was $9,600,000 and all individual net assets had appraised fair values that equaled their reported book values. On December 31, 2022, what is the balance of the Equity Investment account on the Investor's balance sheet? Select one: a. $3,048, 000 b. $2,880, 000 c. $3,552,000 d. $2,964,000
- Tamarisk Inc., a public company, owns 20% of Dong Ltd's common shares for strategic purposes. The investment's carrying amount at January 1, 2024, is $299,000. During the year, Dong reported profit of $255,400 and paid a dividend of $22,400. The investment's fair value on December 31, 2024, Tamarisk's year end, is $316,100. (a) Assuming Tamarisk has significant influence over Dong, indicate the amount reported on the balance sheet for the investment at December 31 and the amount of income from this investment reported in the income statement. Balance Sheet: Income Statement: eTextbook and Media $ Equity MethodAn investor company purchased 17,000 of the 50,000 outstanding shares of the investee company's common stock for $338,000 on January 1, 2021. During 2021, the investee company declared dividends of $33,000 and reported earnings for the year of $158,000. If the investor company uses the equity method of accounting for its investment in the investee company, it should report Dividend Revenue from the investee for 2021 in the amount of $_______. (If there is no Dividend Revenue, then enter 0. Do not round your answer for any part of the computation.)Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee's operations and decision making. On January 1, 2021, the balance in the Investment in Lindman account is $382,000. Amortization of excess fair value associated with the 30% ownership is $10,500 per year. In 2021, Lindman earns an income of $156,000 and declares cash dividends of $39,000. Previously, in 2020, Lindman had sold inventory costing $54, 600 to Matthew for $78,000. Matthew consumed all but 20 percent of this merchandise during 2020 and used the rest during 2021. Lindman sold additional inventory costing $59, 400 to Matthew for $90,000 in 2021. Matthew did not consume 40 percent of these 2021 purchases from Lindman until 2022. What amount of equity method income would Matthew recognize in 2021 from its ownership interest in Lindman? What is the equity method balance in the Investment in Lindman account at the end of 2021?
- An investor company purchased 60,000 of the 500,000 outstanding shares of the investee company's common stock on January 1, 2021. During 2021, the investee company reported earnings for the year of $459,000, and declared and paid an $0.52 per share cash dividend during 2021. If the investor company uses the fair value method of accounting for its investment in the investee company, it should report Dividend Revenue from the investee for 2021 in the amount of $_______. (If there is no Dividend Revenue, then enter 0. Do not round your answer for any part of the computation.)An entity owed 100% of another's entity's preference shares and 20% of ordinary shares. The investee's share capital outstanding on December 31, 2019 included 5,000,000 of 10% cumulative preference shares and 10,000,000 of ordinary shares. The investee reported net income of 8,000,000 for 2019. No dividend was declared for both preference and ordinary shares in 2019. What amount should be reported as investment income for 2019? a. 1,600,000 b. 1,500,000 c. 2,000,000 d. 1,000,000Irene received the following dividends in 2021: • an eligible dividend of $16,550 •a non-eligible dividend of $12,450 •a dividend of $21,975 from a foreign corporation, net of $3300 of foreign tax withheld •a stock dividend of 444 shares; the paid-up capital of the corporation was increased by $25 for each share issued, and the issuing company is a public company Irene has a combined federal and provincial tax rate of 45%. Required: Indicate total after-tax amount received by Irene in 2021. For each investment you should identify the total cash received, the taxable amount, the taxes, any related dividend tax credits (if applicable), and total cash (after- tax). Use a chart to help organize your calculations.
- On January 1, 2020, Windsor Company purchased 6,100 shares of Kusher Company stock for $439,200. Windsor's investment represents 30 percent of the total outstanding shares of Kusher. During 2020, Kusher paid total dividends of $152,000 and reported net income of $456,000. What revenue does Windsor report related to this investment and what is the amount to be reported as an investment in Kusher stock at December 31? Revenue $ Investment in Kusher stock at December 31 $Mathilda Corp has a 90% interest in Gambit Co. while the latter has an 80% interest in Chan Corp. For the year ended December 31,2019. The net income from own operations of these three companies were: Mathilda- Php1M, Gambit-Php500K, and Chan-Php 250K. What is the amount of minority interest in net income for 2019.Matthew, Inc., owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2021, the balance in the Investment in Lindman account is $408,000. Amortization of excess fair value associated with the 30% ownership is $9,500 per year. In 2021, Lindman earns an income of $181,500 and declares cash dividends of $60,500. Previously, in 2020, Lindman had sold inventory costing $40,200 to Matthew for $67,000. Matthew consumed all but 30 percent of this merchandise during 2020 and used the rest during 2021. Lindman sold additional inventory costing $44,800 to Matthew for $80,000 in 2021. Matthew did not consume 40 percent of these 2021 purchases from Lindman until 2022. What amount of equity method income would Matthew recognize in 2021 from its ownership interest in Lindman? What is the equity method balance in the Investment in Lindman account at the end of 2021?
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