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Evan Company reports net income of $192,000 each year and declares an annual cash dividend of $90,000. The company holds net assets of $1,830,000 on
Evan Company reports net income of $192,000 each year and declares an annual cash dividend of $90,000. The company holds net assets of $1,830,000 on January 1, 2020. On that date, Shalina purchases 40 percent of Evan's outstanding common stock for $862,000, which gives it the ability to significantly influence Evan. At the purchase date, the excess of Shalina's cost over its proportionate share of Evan's book value was assigned to goodwillOn December 31, 2022, what is the Investment in Evan Company balance (equity method) in Shalina's financial records? A necessary condition to use the equity method of reporting for an equity investment is that the investor company must Multiple Choice have the ability to exercise significant influence over the operating and financial policies of the investee. own at least 30% of the investee's voting stock possess a controlling interest in the investee's voting stock not have the ability to exercise significant influence over the operating and financial policies of the investee
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