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Star Company purchased 50,000 shares of the 125,000 common shares outstanding of Brile Inc. on January 1, 2021 for $450,000. Brile reported net income of
Star Company purchased 50,000 shares of the 125,000 common shares outstanding of Brile Inc. on January 1, 2021 for $450,000. Brile reported net income of $150,000 for the year ended December 31, 2021 and paid a cash dividend of $45,000 on October 1, 2021. The fair value of the shares held by Star on December 31, 2021 was $500.000.
a) If Star does NOT elect to use fair value option to account for its investment in Brile. What is the balance in the Equity Investment account on Star's December 31, 2021 balance sheet?
What is the increase in income related to the Brile investment reported on Star's 2021 income statement?
b) If Star ELECTS to use fair value option to account for its investment in Brile. What is the balance in the Equity Investment account on Star's December 31, 2021 balance sheet?
What is the increase in income related to the Brile investment reported on Star's 2021 income statement?
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Mcgraw Hills Homework Manager Access Code To Accompany Introduction To Managerial Accounting
Authors: Peter Brewer, Ray Garrison, Eric Noreen
3rd Edition
0073264938, 978-0073264936
