(Equity Method) Parent Co. invested $ 1, 000,000 in Sub Co. for 25% of its outstanding stock. Sub Co. pays out 40% of net income in dividends each year.
Investment in Sub Co.
1,000,000
110,000
44,000
Instructions:
How much was Parent Co.’s shares of Sub Co.’s net income for the year?
How much was Parent Co.’s shares of Sub Co.’s dividends for the year?
What was Sub Co.’s total net income for the year?
What was Sub Co.’s total dividends for the year?
