1. Company A paid $400,000 for the investment

You determine how Company A paid for the investment.

Any excess is allocated to undervalued fixed assets with a seven year life

2. Show the impact on Company A's Income Statement and Balance sheet for the Company B Dividend

Total Dividend paid was $1,000,000

3. Show the impact on Company B's Income Statement for Company A's share of Company B's Income. Company B's income is reflected on the Company B Income statement.'

4. Show the impact of any other equity method transactions that need to be recorded.

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Project 1 Balance Sheet Company A Buys 10% of Company B Company B Company A Assets $2,696, 190 Current Assets $1,915,316 Investment in Company B Investments 992,500 80,765 352,226 266, 181 177,327 Other Intangible Assets Equipment Other Assets 856,341 360,515 33,421 64,312 $4,010,779 Deferred Tax Assets Goodwill $3,784,315 Total Assets Liabilities $2,045,968 916,862 $2,962,830 $1,056,641 1,648,684 $2,705,325 Current Liabilities Long Term Liabilities Total Liabilities Stockholder's Equity Non-Controlling Interest Common Stock 107 2,917 386,401 1,119,775 (57,733) (403,518) $1,047,949 44,617 217,209 27,391 1,018,667 Preferred Stock Additional Paid In Capital Treasury Stock Retained Earnings (228,894) $1,078,990 Total Stockholer's Equity $4,010,779 Total Labilities and Stockholder's Equity $3,784,315 Project 1 Income Statement Company B Declares a $1,000,000 Dividend |Company A Company B $ 10,695,652 7,448,067 $ 3,247,585 2,535,373 70,226 672,827 (30,841) $6,920,384 5,135,927 $1,784,457 103,558 11,376 1,645,245 $ 24,278 (12,694) 698,748 (248,722) $ 461,610 Revenues Cost of Goods Sold Gross Profit Operating and Selling Expenses Asset Impairment General and Administrative Expenses Net Income from Operations Non-Controlling Interest In Income Other Income/(Loss) Income Tax (Expense) Benefit 107 (26,485) (1,697) (58,916) Net Income %24