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Unformatted text preview: The criteria that Millers Mngt. Should apply is that it recognizes investment income as a percentage which is 1,000,000/6,000,000 = 1/6 = .17 = 17% 2. Assume Miller accounts for its investment in Marlon using the equity method. Ignoring income taxes, deter- mine the amounts related to the investment to be reported in its 2011: a. Income statement. 12,000,000 X 17% = $2,040,000 Investment Revenue = $2,040,000 b. Balance sheet Net Asset = 66,000,000 66,000,000 24,000,000 = 42,000,000 42,000,000 1,020,000 (dividends) = 40,980,000 Net Assets c. Statement of cash flows. Out flow of $19,000,000 for purchase Inflow of dividends calculated at 6,000,000 x 17% = $1,020,000...
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This note was uploaded on 08/19/2011 for the course ACC 306 ACC306 taught by Professor Timathycrawford during the Spring '11 term at Ashford University.
- Spring '11