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Please explain how to get the numbers! Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at underlying book
Please explain how to get the numbers!
Winston Corporation purchased 40 percent of the stock of Fullbright Company on January 1, 20X2, at underlying book value. During the period of January 1, 20x2, through December 31, 20X4, the market value of Winston's investment in Fullbright's stock increased by $20,000 each year. The companies reported the following operating results and dividend payments during the first three years of intercorporate ownership: Year 20x2 20x3 20X4 Winston Corporation Operating Income Dividends $100,000 $ 40,000 60,000 80,000 250,000 120,000 Fullbright Company Net Income Dividends $70,000 $30,000 40,000 60,000 25,000 50,000 Required: Compute the net income reported by Winston for each of the three years, assuming it accounts for its investment in Fullbright by carrying the investment at fair value, or using the equity method. Answer is not complete. Net Income Fair Value Year 20X2 $ 112,000 $ Equity Method 128,000 76,000 260,000 20X3 20X4Step by Step Solution
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