Essay
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.
Required:
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.
Correct Answer:
Verified
Correct Answer:
Verified
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