Darlene Inc. purchased 23,600 common shares (20%) of Carlyle Ltd. on January 1, Year 4, for $306,800. It did not have significant influence over Carlyle. It elected to classify the investment as fair value through OCI. On September 30, Year 5, Darlene obtained significant influence when there was a restructuring of the Board of Directors. Accordingly, Darlene adopted the equity method or prospective basis. Additional information on Carlyle for the two years ending December 31, Year 5, is as follows: Period Year 4 Jan.-Sept. Year 5. Oct.-Dec. Year 5 Net Income $186,000 146,000 59,000 Dividends Paid $126,000 106,000 29,000 Market Value per Share at end of period $14.00 14.60 15.00 On January 1, Year 6, Darlene sold its investment in Carlyle for $354,000. Required: (a) Calculate the balance in the investment account at the end of each period. (Omit $ sign in your response.)
Darlene Inc. purchased 23,600 common shares (20%) of Carlyle Ltd. on January 1, Year 4, for $306,800. It did not have significant influence over Carlyle. It elected to classify the investment as fair value through OCI. On September 30, Year 5, Darlene obtained significant influence when there was a restructuring of the Board of Directors. Accordingly, Darlene adopted the equity method or prospective basis. Additional information on Carlyle for the two years ending December 31, Year 5, is as follows: Period Year 4 Jan.-Sept. Year 5. Oct.-Dec. Year 5 Net Income $186,000 146,000 59,000 Dividends Paid $126,000 106,000 29,000 Market Value per Share at end of period $14.00 14.60 15.00 On January 1, Year 6, Darlene sold its investment in Carlyle for $354,000. Required: (a) Calculate the balance in the investment account at the end of each period. (Omit $ sign in your response.)
Chapter8: Consolidated Tax Returns
Section: Chapter Questions
Problem 36P
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