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Huang Company owns 20,000 of the 50,000 outstanding ordinary shares of Xi Inc.The balance in the investment account at January 1, 2012 was ¥500,000,000.During 2012, Xi earned ¥800,000,000 and paid cash dividends of ¥640,000,000.
-Huang should report investment revenue for 2012 of

Question

Use the following information for questions 
Huang Company owns 20,000 of the 50,000 outstanding ordinary shares of Xi Inc.The balance in the investment account at January 1, 2012 was ¥500,000,000.During 2012, Xi earned ¥800,000,000 and paid cash dividends of ¥640,000,000.
-Huang should report investment revenue for 2012 of

Quizplus · Accepted Answer

Huang owns 40% of Xi Inc. (20,000/50,000 shares), so it should recognize 40% of Xi's earnings as investment revenue. 40% of ¥800,000,000 is ¥320,000,000.

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