Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 80,000 shares of Silva Company directly from one of the founders for a price of $64 per share. Silva has 250,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $196,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $747,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. 1. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
Equity Method for Stock Investment On January 4, Year 1, Ferguson Company purchased 80,000 shares of Silva Company directly from one of the founders for a price of $64 per share. Silva has 250,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $196,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $747,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva. 1. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter11: Stockholders' Equity
Section: Chapter Questions
Problem 11.13AMCP
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Equity Method for Stock Investment
On January 4, Year 1, Ferguson Company purchased 80,000 shares of Silva Company directly from one of the founders for a price of $64 per share. Silva has 250,000 shares outstanding, including the Daniels shares. On July 2, Year 1, Silva paid $196,000 in total dividends to its shareholders. On December 31, Year 1, Silva reported a net income of $747,000 for the year. Ferguson uses the equity method in accounting for its investment in Silva.
1. Determine the December 31, Year 1, balance of Investment in Silva Company Stock.
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