On 1 March 2016, Romeo Ltd acquired a 34 percent share (20 000 shares) in Juliet Ltd
Question:
On 1 March 2016, Romeo Ltd acquired a 34 percent share (20 000 shares) in Juliet Ltd for $680 000. On 30 June 2016, Juliet announced earnings at $3.80 per share and also paid out dividends of $1.60 per share.
1. Using the cost method, what is the value of the investment in Juliet Ltd, as listed on Romeo's balance sheet?
2. Using the cost method, what is the value of the revenue from this investment recorded by Romeo?
3. Using the equity method, what is the value of the investment in Juliet Ltd, as listed on Romeo's balance sheet?
4. Using the equity method, what is the value of the revenue from this investment recorded by Romeo?
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1 Using the Cost Method for recording investments the value of the investment is simply the cost tha...View the full answer
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Related Book For 
Financial Accounting An Integrated Approach
ISBN: 9780170349680
6th Edition
Authors: Ken Trotman, Michael Gibbins, Elizabeth Carson
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