Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please show work. thank you! Matthew, Incorporated, owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the

image text in transcribed

please show work. thank you!

Matthew, Incorporated, owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee's operations and decision making. On January 1, 2024, the balance in the Investment in Lindman account is $409,000. Amortization associated with this acquisition is $11,400 per year. In 2024 , Lindman earns an income of $83,000 and declares cash dividends of $41,500. Previously, in 2023 , Lindman had sold inventory costing $50,400 to Matthew for $72,000. Matthew consumed all but 25 percent of this merchandise during 2023 and used the rest during 2024. Lindman sold additional inventory costing $59,400 to Matthew for $90,000 in 2024. Matthew did not consume 40 percent of these 2024 purchases from Lindman until 2025. Required: a. What amount of equity method income would Matthew recognize in 2024 from its ownership interest in Lindman? b. What is the equity method balance in the Investment in Lindman account at the end of 2024

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Management Accounting

Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Susan Wolcott

2nd Edition

1742166148, 978-1742166148

More Books

Students also viewed these Accounting questions

Question

how do we manage suppliers over time?

Answered: 1 week ago

Question

plan and structure your literature review;

Answered: 1 week ago

Question

establish an effective note-taking and recording system;

Answered: 1 week ago

Question

identify what you need to read and where to find it;

Answered: 1 week ago