Assessing Financial Statement Effects of Equity Method Securities

The following transactions involve investments in marketable securities and are accounted for using the equity method.

(1)	Purchased 12,000 common shares of Barth Co. at $9 cash per share; the shares represent 30% ownership in Barth.
(2)	Received a cash dividend of $1.25 per common share from Barth.
(3)	Recorded income from Barth stock investment when Barths net income is $80,000.
(4)	Sold all 12,000 common shares of Barth for $120,500.

Balance Sheet										Income Statement
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contrib. Capital	+	Earned Capital		Revenues	-	Expenses	=	Net Income
(1) Buy 30% of Barth stock	Answer	+	Answer	=	Answer	+	Answer	+	Answer		Answer	-	Answer	=	Answer
(2) Receive dividend	Answer	+	Answer	=	Answer	+	Answer	+	Answer		Answer	-	Answer	=	Answer
(3) Recognize share of Barth net income	Answer	+	Answer	=	Answer	+	Answer	+	Answer		Answer	-	Answer	=	Answer
(4) Sold Barth investment	Answer	+	Answer	=	Answer	+	Answer	+	Answer		Answer	-	Answer	=	Answer

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