What is the Equity in Howell Income that should be reported by Acker in 2017?

Question

Quizplus · Accepted Answer

To find the equity in Howell Income that should be reported by Acker, we need to use the equity method of accounting. This method requires us to multiply the percentage of ownership with the net income of Howell Income. In this case, Acker owns 60% of Howell Income, and the net income reported by Howell Income in 2017 is $64,000. Therefore, the equity in Howell Income that should be reported by Acker in 2017 is:
$64,000 x 60% = $38,400
Hence, the correct answer is D, $38,400.

What Is the Equity in Howell Income That Should Be