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Let's say company 1 bought common stock in company 2 for $400,000. In current year, company 2 had net income of $50,000 and paid dividend of $32,000. The market value of investment in company 2 was $410,000 at the end of year.
a) let's say that company 1 owns 10% of the shares in company 2 and would like the investment to be available for sale securities. Using balance equations, show the effects of transactions above on the accounts of company 1.
b) Let's say company 1 owns 25% of the shares in company 2. Using balance equations, show the effects of transactions above on the accounts of company 1.
a) let's say that company 1 owns 10% of the shares in company 2 and would like the investment to be available for sale securities. Using balance equations, show the effects of transactions above on the accounts of company 1.
b) Let's say company 1 owns 25% of the shares in company 2. Using balance equations, show the effects of transactions above on the accounts of company 1.