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发帖数: 66 | 1 Question CPA-00344
On January 1, Year 1, Mega Corp. acquired 10% of the outstanding voting
stock of Penny, Inc. On January
2, Year 2, Mega gained the ability to exercise significant influence over
financial and operating control of
Penny by acquiring an additional 20% of Penny's outstanding stock. The two
purchases were made at prices
proportionate to the value assigned to Penny's net assets, which equaled
their carrying amounts. For the
years ended December 31, Year 1 and Year 2, Penny reported the following:
Year 1 Year 2
Dividends paid $200,000 $300,000
Net income 600,000 650,000
In Year 2, what amounts should Mega report as current year investment income
and as an adjustment, before
income taxes, to Year 1 investment income?
Year 2 Adjustment Year 1
Investment income investment income
a. $195,000 $160,000
b. $195,000 $100,000
c. $195,000 $40,000
d. $105,000 $40,000
Explanation
Choice "c" is correct, Year 2 investment income of $195,000 and an
adjustment to Year 1 investment income
of $40,000.
Rule: When two or more purchases of stock cause ownership to go from less
than 20% to more than 20%,
the equity method should be used and the periods during which the cost
method was used are retroactively
restated.
Year 2 investment income = 30% x $650,000 = $195,000
Year 2 adjustment to Year 1 investment income:
10% x $600,000 net income = $60,000
10% x $200,000 dividends paid = (20,000)
adjustment to Year 1 $40,000
如果倒回去全用equity method,为何Y2的investment income不减去300,000*30%呢？
啥时候加减dividend income呢？谢谢！ | h*******0
发帖数: 92 | 2 因为第一年的时候, MEGA CORP已经先RECORD 了 DIVIDEND INCOME, 所以ADJUST的时候
,要把以前RECORD 的DIVIDEND INCOME 减去,不然DIVIDEND INCOME就会被RECORD了两次
了.
第二年,因为已经有SIGNIFICANT INFLUENCE了. 所以就直接按照PERCENTAGE RECORD
INVESTMENT INCOME.而且在EQUITY METHOD下, PENNY CORP 的NET INCOME TIMES THE
PERCENTAGE 应该就直接是INVESTMENT INCOME了 |
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