Solution-Calculate the balance in the investment account

Calculate the balance in the investment account

Reference no: EM132826862

Problem - Right Company purchased 28,000 common shares (20%) of ON Inc. on January 1, Year 11, for $253,000. Right uses the equity method to report its investment in ON because it has significant influence in the operating and investing decisions made by OH. Right has no legal obligation to pay any of ON's liabilities and has not committed to contribute any more funds to ON. Additional information for ON for the four years ending December 31, Year 14, is as follows:

Year	Net Income	Dividends Paid	Market Value per share at December 31
Year 11	$230,000	$65,000	$12
Year 12	(330,000)	65,000	6
Year 13	(430,000)	0	1
Year 14	(530,000)	0	0

Required -

a. Calculate the balance in the investment account for each of the Years 11 through 14. Assume that the market value is used in determining whether the investment is impaired.

b. Determine the total income to be reported by Right from its investment in ON for each of the Years 11 through 14.

Reference no: EM132826862

Questions Cloud

Which areas are affected by bi : Which of the following areas are affected by BI? Which BI can catalyze a business success in terms of? Distinguish the products and services that drive revenues

Research methodology assignment : What have others done about the problem and What is the relevance of the work to your current research - What conclusion and insights were offered

Clear objectives for waste reduction : A truck manufacturing company wanted to drop the assembly line approach and redesign the car assembly process completely. Now groups of employees

Describe the descriptive statistics on the discussion : Describe the descriptive statistics on the discussion board to be examined before and after implementation of the chosen anticrime/prevention program.

Calculate the balance in the investment account : Right Company purchased 28,000 common shares (20%) of ON Inc. on January 1, Year 11, for $253,000. Calculate the balance in the investment account

What is the bottleneck station : A serial line (each station follows the other in a line flow pattern) consists of 5 stations. They have processing rates, in order from beginning to end, of 20,

Which amortization methods produces the highest amortization : Which amortization methods produces the highest amortization expense in the first year of life of an asset that cost $10,000, has an estimated useful life

What is the theoretical flow time of the process : Each flow unit spends 10 minutes at process 1. It is then split into 2 parts: part 1 spends 15 minutes at process 2 and part 2 spends 12 minutes at process 3

What personality traits do you appreciate in older people : Think of the role models you know who are at least 65 years old. What personality traits do you appreciate in these older people? How can you ensure that you.

User Account

All Pages

Calculate the balance in the investment account

Reference no: EM132826862

Reference no: EM132826862

Questions Cloud

Reviews

Write a Review

Accounting Basics Questions & Answers

How much control does fed have over this longer real rate

Coures:- fundamental accounting principles

Accounting problems

Theory of interest - term structure of interest rates

Write a report on internal controls

Prepare the bank reconciliation for company

Cost-benefit analysis

Theory of interest

Liquidity and profitability

What is the expected risk premium on the portfolio

Simple interest and compound interest

Capm and venture capital

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT