You have secured the following information for Companies A, B, and C concerning their internally generated net incomes (excluding subsidiary income) and dividends paid: A B C2015 Internally generated net income . . . . $30,000 $20,000 $10,000Dividends declared and paid . . . . . . . . . . . . .10,000 5,0002016 Internally generated net income . . . . 50,000 30,000 25,000Dividends declared and paid . . . . . . . . . . . . .10,000 5,000 5,0002017 Internally generated net income . . . . 40,000 40,000 30,000Dividends declared and paid . . . . . . . . . . . . .10,000 5,000 5,0001. Assume Company A acquires an 80% interest in Company B on January 1, 2015, and Company B acquires a 60% interest in Company C on January 1, 2016. Prepare the simple equity method adjusting entries made by Companies A and B for subsidiary investments for the years 2015 through 2017.2. Assume Company B acquires a 70% interest in Company C on January 1, 2015, and Company A acquires a 90% interest in Company B on January 1, 2017. Prepare the simple equity method adjusting entries made by Companies A and B for subsidiary investments for the years 2015 through 2017.
You have secured the following information for Companies A, B, and C concerning their internally generated net incomes (excluding subsidiary income) and dividends paid:
A B C
2015 Internally generated net income . . . . $30,000 $20,000 $10,000
Dividends declared and paid . . . . . . . . . . . . .10,000 5,000
2016 Internally generated net income . . . . 50,000 30,000 25,000
Dividends declared and paid . . . . . . . . . . . . .10,000 5,000 5,000
2017 Internally generated net income . . . . 40,000 40,000 30,000
Dividends declared and paid . . . . . . . . . . . . .10,000 5,000 5,000
1. Assume Company A acquires an 80% interest in Company B on January 1, 2015, and Company B acquires a 60% interest in Company C on January 1, 2016. Prepare the simple equity method
2. Assume Company B acquires a 70% interest in Company C on January 1, 2015, and Company A acquires a 90% interest in Company B on January 1, 2017. Prepare the simple equity method adjusting entries made by Companies A and B for subsidiary investments for the years 2015 through 2017.
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