Question
Culver Co. invested $1,080,000 in Larkspur Co. for 25% of its outstanding stock. Larkspur Co. pays out 40% of net income in dividends each year.
Culver Co. invested $1,080,000 in Larkspur Co. for 25% of its outstanding stock. Larkspur Co. pays out 40% of net income in dividends each year. Use the information in the following T-account for the investment in Larkspur to answer the following questions.
Investment in Larkspur Co
Dr. Cr.
| 1,080,000 | |
| 116,000 | |
| 46,400 |
(a) How much was Culver Co.s share of Larkspur Co.s net income for the year?
(b) What was Larkspur Co.s total net income for the year?
(c) What was Larkspur Co.s total dividends for the year?
(d) How much was Culver Co.s share of Larkspur Co.s dividends for the year?
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Accounting And Finance For Non-Specialists
Authors: Eddie McLaney, Peter Atrill
11th Edition
1292244011, 9781292244013
