Assessing Financial Statement Effects of Equity Method Securities Use the financial statement effects template to record the following transactions involving investments in marketable securities accounted for using the equity method. a. Purchased 12,000 common shares of Bakersfield Co. at $11 per share; the shares represent 30% ownership in Bakersfield. b. Received a cash dividend of $1.75 per common share from Bakersfield. c. Bakersfield reported annual net income of $120,000. d. Sold all 12,000 common shares of Bakersfield for $152,000. Use negative signs with answers, if appropriate.

				Balance Sheet								Income Statement
			Noncash				Contrib.		Earned
Transaction	Cash Asset	+	Assets	=	Liabilities	+	Captial	+	Capital		Revenues	-	Expenses	=	Net income
d. Sold all Bakersfield shares.	Answer		Answer		Answer		Answer		Answer		Answer		Answer		Answer

Concord Company purchases an investment in Bloomingdale Company at a purchase price of $2.5 million cash, representing 30% of the book value of Bloomingdale. During the year, Bloomingdale reports net income of $450,000 and pays cash dividends of $110,000. At the end of the year, the market value of Concords investment is $2.8 million. a. What amount does Concord report on its balance sheet for its investment in Bloomingdale? $Answer

b. What amount of income from investments does Concord report? $Answer