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Company A is a 40% investor in Company B and uses the equity method to account for its investment. On January 1, 2016, the balance
Company A is a 40% investor in Company B and uses the equity method to account for its investment. On January 1, 2016, the balance in Company As Investment in Company B account was $8,000. Company B reported losses of $50,000 in 2016 and $30,000 in 2017 and paid no dividends in either year. In 2018, Company B reported net income of $90,000 and paid dividends to all shareholders totaling $16,000.
How much income (if any) will Company A report from its investment in 2018?
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