Question
Suppose that Chuckie Cheese acquired 33.33% (one-third) of Toys R US from an unrelated third party for $80 million on October 1, 2012. At the
Suppose that Chuckie Cheese acquired 33.33% (one-third) of Toys R US from an unrelated
third party for $80 million on October 1, 2012. At the acquisition date, the total book value of Toys R US's shareholders' equity was $240 million. Both have September 30 fiscal year ends. For the fiscal year ended September 30, 2013, Toys R US earned a total net income of $70 million and paid total dividends of $20 million.
How much income, if any, will Chuckie Cheese include in its earnings for fiscal 2013 in relation to its Toys R US investment?
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Financial and Managerial Accounting
Authors: John J Wild, Ken W. Shaw
8th edition
1260247856, 978-1260247855
