What is the equity method balance in the investment

Assignment Help Financial Accounting

Reference no: EM131222972

Russell owns 30 percent of the outstanding stock of Thacker and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2013, the balance in the Investment in Thacker account is $347,000. Amortization associated with this acquisition is $10,400 per year. In 2013, Thacker earns an income of $219,000 and pays cash dividends of $73,000. Previously, in 2012, Thacker had sold inventory costing $26,400 to Russell for $44,000. Russell consumed all but 25 percent of this merchandise during 2012 and used the rest during 2013. Thacker sold additional inventory costing $33,600 to Russell for $60,000 in 2013. Russell did not consume 40 percent of these 2013 purchases from Thacker until 2014.

a. What amount of equity method income would Russell recognize in 2013 from its ownership interest in Thacker?

Equity income $

b. What is the equity method balance in the Investment in Thacker account at the end of 2013?

Reference no: EM131222972

Questions Cloud

Write sql statements to create the corresponding relations : Consider the university database from Exercise 2.3 and the ER diagram you designed. Write SQL statements to create the corresponding relations and capture as many of the constraints as possible. If you cannot capture some constraints, explain why.

Absolute worldwide comparability of financial statements : What can adversely affect the independence of the IASB? Would worldwide adoption of IFRS result in absolute worldwide comparability of financial statements? Why or why not? What should accountants and investors do to cope with the comparability issue..

Comment fully on the origins of the atlantic slave trade : Comment fully on the origins and consequences of the Atlantic slave trade. Include a detailed comment on what you consider to have been the likely short and long term impact of the trade on African societies.

Does wealth still follow power in nonmarket societies : Julius Caesar and J.P. Morgan were both wealthy and powerful men. What is the difference in the origins of their wealth and their power? Does power still follow wealth in modern economic societies? Does wealth still follow power in nonmarket socie..

What is the equity method balance in the investment : Russell owns 30 percent of the outstanding stock of Thacker and has the ability to significantly influence the investee’s operations and decision making. On January 1, 2013, the balance in the Investment in Thacker account is $347,000. What amount of..

Prepare a report evaluating the e-business : The assignment is an opportunity to demonstrate that you have understood the concepts covered in the course, can apply them to a business situation and that you can enrich the discussion with ideas from real world examples.

Write an ethical culture analysis paper : Write an ethical culture analysis paper. - Paper should be an in-depth investigation and analysis of the ethical culture and performance of a large organization based on course concepts.

Calculate the current ratio based on inventory as reported : Suppose this information (in millions) is available for the Automotive and Other Operations Divisions of General Motors Corporation for a recent year. General Motors Corporation uses the LIFO inventory method. Inventory turnover ratio 10.41 times Day..

Arrays of floating point values : In this task you must write a function that determines whether a point lies inside a rectangle. The point and rectangle are both specified using arrays of floating point values.

User Account

All Pages