8. On January 1, 2017, Alpha Company purchased a significant influence shares in
ID: 2563289 • Letter: 8
Question
8. On January 1, 2017, Alpha Company purchased a significant influence shares investment in the Bravo-Zulu Company for $250,000. This investment balance represents 40% of the equity of the Bravo-Zulu Company. During 2017, Bravo-Zulu Company reported Net Income of $25,000 on November 15, 2017 Bravo-Zulu Company paid cash dividends of $10,000 to its shareholders. Using this information, what are the FY 2017 balances in Alpha Company's account balances for: a. Investment in Bravo-Zulu b. Investment Income
Explanation / Answer
a) Investment in Bravo-Zulu $ purchase of investment 250,000 Add:investment income(25000*40%)= 10000 less:dividend (10,000*40%) -4000 Investment in Bravo-zulu 256,000 Answer b) investment income $10,000 Answer
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