When these type of stock acquisitions (INVESTMENTS)occur.. One company buying st

Question

When these type of stock acquisitions (INVESTMENTS)occur.. One company buying stock of another... the volume of stock acquired can fall into 3 catagories.... NonINFLUENTIAL INFLUENTIAL CONTROLLING INFLUENCE THERE ARE DIFFERENT ACCOUNTING TRATMENTS FOR EACH TYPE-FOCUS ON NON INFLUENTIAL VS INFLUENTIAL REPORTING...... Again....Corp. A bought Corp X stock for $ 100,000. Corp X had net Income of 1,000,000 this year. They declared cash dividends and Corp A received S2500 in Dividends via check. Value of the investment Account to start is $100,000. What is the balance of the 3 accounts listed at the end of this year 10% INTERST IN Co X 25% INTEREST IN CoX

Explanation / Answer

Answer 1

10% Interest in Co. X

Dividend Income Earning from Investment Investment Balance

2500 N.A. 100000   

25% Interest in Co. X

Dividend Income Earning from Investment Investment Balance

2500 (1000000*25%-2500) =247500 100000   

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