Liquidating dividend equity method dating ladybird books
On December 31, 20X4, the trial balance data for the two companies are as follows: 4. Shipping's retained earnings was ,000 on the date of acquisition.
The main pronouncement on equity-method reporting, APB 19 (ASC 323 and 325) requires all of the following except: A.
The dividends received are accounted for as a reduction of the investment value because dividends are a partial return of the investor's investment. acquired 30% of the stock of 2005 GROUP for ,000 on Jan. During the year, 2005 GROUP paid dividends totaling ,000 and had net income of 0,000.
Under the equity method, the ,000 in dividends (,000 × 30%) received by The Sisters, Inc.
The equity method of accounting for stock investments is used when the investor is able to significantly influence the operating and financial policies or decisions of the company it has invested in.
Given this influence, the investor adjusts the value of its equity investment for dividends received from, and the earnings (or losses) of, the corporation whose stock has been purchased.30% share of net income (0,000 × 30%) as they treat their share of net income as revenue.