Tinker Co.owns 25% of the common stock of Harbor Co.and uses the equity method to account for the investment.During 2008,Harbor reported income of $120,000 and paid dividends of $40,000.Harbor owns a building with a useful life of twenty years which is undervalued by $80,000.
Required:
Prepare a schedule to show the equity income Tinker should recognize for 2008 related to this investment.

Question

Quizplus · Accepted Answer

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 2008,Harbor reported income of $120,000 and paid dividends of $40,000.Harbor owns a building with a useful life of twenty years which is undervalued by $80,000.
Required:
Prepare a schedule to show the equity income Tinker should recognize for 2008 related to this investment.

Tinker CoOwns 25% of the Common Stock of Harbor Co