Tinker Co.owns 25% of the common stock of Harbor Co.and uses the equity method to account for the investment.During 2018, Harbor reported income of $120,000 and paid dividends of $40,000.Harbor owns a building with a useful life of twenty years, which was undervalued by $80,000 at the time that Tinker bought its shares of Harbor's common stock.
Required:
Prepare a schedule to show the equity income Tinker should recognize for 2018 related to this investment.

Question

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The Answer of Tinker Co.owns 25% of the common stock of Harbor Co.and uses the equity method to account for the investment.During 2018, Harbor reported income of $120,000 and paid dividends of $40,000.Harbor owns a building with a useful life of twenty years, which was undervalued by $80,000 at the time that Tinker bought its shares of Harbor's common stock.
Required:
Prepare a schedule to show the equity income Tinker should recognize for 2018 related to this investment.

Tinker CoOwns 25% of the Common Stock of Harbor Co