How much income should au report from investment

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On January 1, 2019, AU Company purchased 15% of the common shares of BU Corporation for $40,000, giving AU significant influence over BU. At that time, the shareholders' equity of BU had a book value of $200,000 and the identifiable net assets had fair values that were equal to their book values except for equipment, which was undervalued by $8,000 relative to their current fair values. This equipment had a remaining useful life of 4 years. BU's net income during 2019 was $60,000. BU paid dividends of $50,000 on its common shares during 2019. As at December 31, 2019, it was determined that there had been no impairment of BU's shares.

Question 1: How much income should AU report from its investment in BU for 2019?

Reference no: EM132582408

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