On January 1, 2021, Kristine Company acquired 10% of the outstanding voting shares of another entity. On January 1, 2022, Kristine Company gained the ability to exercise significant influence over financial and operating control of the entity by acquiring additional 20% of the investee’s outstanding shares. The two purchase were made at price proportionate to the value assigned to the investee’s net assets which equaled their carrying amount. For the years ended December 31, 2021 and 2022, the investee reported the following: 2021 2022 Dividend paid 3,000,000 8,000,000 Net income 7,000,000 9,000,000 What total amount should Kristine include in profit or loss for the year ended December 31, 2022?
On January 1, 2021, Kristine Company acquired 10% of the outstanding voting shares of another entity. On January 1, 2022, Kristine Company gained the ability to exercise significant influence over financial and operating control of the entity by acquiring additional 20% of the investee’s outstanding shares. The two purchase were made at price proportionate to the value assigned to the investee’s net assets which equaled their carrying amount. For the years ended December 31, 2021 and 2022, the investee reported the following: 2021 2022 Dividend paid 3,000,000 8,000,000 Net income 7,000,000 9,000,000 What total amount should Kristine include in profit or loss for the year ended December 31, 2022?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
Related questions
Question
8. On January 1, 2021, Kristine Company acquired 10% of the outstanding voting shares of another
entity. On January 1, 2022, Kristine Company gained the ability to exercise significant influence over
financial and operating control of the entity by acquiring additional 20% of the investee’s outstanding
shares. The two purchase were made at price proportionate to the value assigned to the investee’s
net assets which equaled their carrying amount. For the years ended December 31, 2021 and 2022,
the investee reported the following:
2021 2022
Dividend paid 3,000,000 8,000,000
Net income 7,000,000 9,000,000
What total amount should Kristine include in profit or loss for the year ended December 31, 2022?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning