The following are the 2013 Income Statements of Roller Corp and Larmer Corp. Other Information: During 2013 Larmer paid dividends of $24,000. Roller acquired its 30% stake in Larmer at a cost of $400,000 and uses the cost method to account for its investment. The acquisition differential amortization schedule showed the following write-off for 2013: During 2013, Larmer paid rent to Roller in the amount of $12,000, which Roller has recorded as other income. In 2012, Roller sold Land to Larmer and recorded a profit of $10,000 on the sale. During 2013, Larmer sold the land to a third party. Both companies are subject to a 40% tax rate. Required: Prepare Roller Inc's 2013 income statement, assuming that Larmer is considered to be a joint venture and is reported using the equity method.

Question

The following are the 2013 Income Statements of Roller Corp and Larmer Corp.  Other Information: During 2013 Larmer paid dividends of $24,000. Roller acquired its 30% stake in Larmer at a cost of $400,000 and uses the cost method to account for its investment. The acquisition differential amortization schedule showed the following write-off for 2013:  During 2013, Larmer paid rent to Roller in the amount of $12,000, which Roller has recorded as other income. In 2012, Roller sold Land to Larmer and recorded a profit of $10,000 on the sale. During 2013, Larmer sold the land to a third party. Both companies are subject to a 40% tax rate. Required: Prepare Roller Inc's 2013 income statement, assuming that Larmer is considered to be a joint venture and is reported using the equity method.

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The Answer of The following are the 2013 Income Statements of Roller Corp and Larmer Corp.  Other Information: During 2013 Larmer paid dividends of $24,000. Roller acquired its 30% stake in Larmer at a cost of $400,000 and uses the cost method to account for its investment. The acquisition differential amortization schedule showed the following write-off for 2013:  During 2013, Larmer paid rent to Roller in the amount of $12,000, which Roller has recorded as other income. In 2012, Roller sold Land to Larmer and recorded a profit of $10,000 on the sale. During 2013, Larmer sold the land to a third party. Both companies are subject to a 40% tax rate. Required: Prepare Roller Inc's 2013 income statement, assuming that Larmer is considered to be a joint venture and is reported using the equity method.

The Following Are the 2013 Income Statements of Roller Corp