Question
The dawson company uses equity method to account for its investment in comb's company. Ignore closing entries record on december 31 to close temporary accounts.
The dawson company uses equity method to account for its investment in comb's company. Ignore closing entries record on december 31 to close temporary accounts. The dawson company ends it fiscal year on december 31 of each year. Dawson amortizes the difference between FMV and BV over 40 year period. What is the investment balance on dec. 31 YR12?
1. on dec. 31 YR 10, Dawson bought 40% of combs common stock for $500,000. Total value of combs company was $800,000 on this date.
2. During YR 11, combs reported 60,000 of net income and paid its shareholders a total of 30,000 of cash dividends.
3. DUring YR 12 combs reported a net income of 10,000 and paid its shareholders a total of 5,000 of cash dividends
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