AlbaNavara
Jun 27, 2011, 07:41 AM
Benson Corporation purchased 25% of the common stock outstanding of Landon Corporation for $600,000. During the year, Landon Corporation reported net income of $200,000 and paid cash dividends of $80,000. The balance of the Stock Investments – Landon on the books of Benson Corporation at the end of the year is?
600,0000
On January 2, Matthews Corporation acquired 20% of the outstanding common stock of Dennehy Company for $450,000. For the year ended December 31, Dennehy reported net income of $90,000 and paid cash dividends of $30,000 on its common stock. At December 31, the carrying value of Matthews' investment in Dennehy under the equity method is
450,000+30,000x0.20 = 456,000
The difference between those two question is it the first need stock investment balance and the second need carrying value?
600,0000
On January 2, Matthews Corporation acquired 20% of the outstanding common stock of Dennehy Company for $450,000. For the year ended December 31, Dennehy reported net income of $90,000 and paid cash dividends of $30,000 on its common stock. At December 31, the carrying value of Matthews' investment in Dennehy under the equity method is
450,000+30,000x0.20 = 456,000
The difference between those two question is it the first need stock investment balance and the second need carrying value?