Does not have enough influence to elect a member on own

Reference no: EM13516222

Stark Co. paid $50 million to own 15% of the outstanding common stock of Baratheon Co. Additionally, Baratheon is heavily dependent on Stark Co.'s technology, and Stark Co. earned $1,000,000 on such transactions. Based on their strategic cooperation and Stark Co.'s technology, Stark Co. often influences strategic decisions that Baratheon Co. makes and influences at least one of the slate of people that Baratheon Co. presents for election to its Board. Stark Co., however, does not have enough influence to elect a member on its own accord. Finally, during 2012, Baratheon Co.:

Earned $20 million of net income
Paid $4 million in dividends

How should Stark Co. reflect its ownership of Baratheon Co. in its 2012 P&L and Balance Sheet?

Reference no: EM13516222

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