in Ramona Company was $410,000. A) Assume Brankov Company owns 10% of the shares of Ramona Company. Brankov Company considers the investment to be available-for-sale securities. Show the effects of the transactions above on the accounts of Brankov Company using the balance sheet equation. B) Assume Brankov Company owns 25% of the shares of Ramona Company. Show the effects of the transactions above on the accounts of Brankov Company using the balance sheet equation.

SWFT Corp Partner Estates Trusts
42nd Edition
ISBN:9780357161548
Author:Raabe
Publisher:Raabe
Chapter8: Consolidated Tax Returns
Section: Chapter Questions
Problem 36P
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Brankov Company purchased common stock in Ramona Company for
$400,000. In the current year, Ramona Company reported net income of $50,000 and
paid a dividend of $32,000. At the end of the year, the market value of the investment
in Ramona Company was $410,000. A) Assume Brankov Company owns 10% of the
shares of Ramona Company. Brankov Company considers the investment to be
available-for-sale securities. Show the effects of the transactions above on the
accounts of Brankov Company using the balance sheet equation. B) Assume
Brankov Company owns 25% of the shares of Ramona Company. Show the effects
of the transactions above on the accounts of Brankov Company using the balance
sheet equation.
Transcribed Image Text:Brankov Company purchased common stock in Ramona Company for $400,000. In the current year, Ramona Company reported net income of $50,000 and paid a dividend of $32,000. At the end of the year, the market value of the investment in Ramona Company was $410,000. A) Assume Brankov Company owns 10% of the shares of Ramona Company. Brankov Company considers the investment to be available-for-sale securities. Show the effects of the transactions above on the accounts of Brankov Company using the balance sheet equation. B) Assume Brankov Company owns 25% of the shares of Ramona Company. Show the effects of the transactions above on the accounts of Brankov Company using the balance sheet equation.
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