Question
At the beginning of the year, the Sean Brewery purchased a 25 percent ownership interest in Mark Pub. The investment cost $12 million. At year
At the beginning of the
year, the Sean Brewery purchased a 25 percent ownership interest in Mark Pub.
The investment cost $12 million. At year
end, Mark Pub declared and paid cash dividends to shareholders
totaling $320,000, after reporting earnings of $2.0 million.
A.
Calculate the income statement effect of Sean's investment in Mark Pub as of year end.
B.
Calculate the book value of Sean's equity investment in Mark Pub at year end.
C.
Calculate the book value of Sean's equity investment in Mark Pub at year end assuming that Sean Brewery
reported a loss of $1.2 million instead of a profit of $2.0 million and still paid its
dividend of $320,000.
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