123da - *Pls note that the above two answers are based on...

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ator Co. invested $1,000,000 in Demo Co. for 25% of its outstanding stock. Demo Co. pays out 40% of net income in dividends each year. Use the information in the following T-account for the investment in Demo to answer the following questions. Investment in Demo Co. 1,000,000 130,000 52,000 (a) How much was Gator Co.'s share of Demo Co.'s net income for the year? The Gator’s co share in the net income of Demo Co. Was $130,000 (b) How much was Gator Co.'s share of Demo Co.'s dividends for the year? The Gator’s co share in the dividends of the Demo Co. was $52,000
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Unformatted text preview: *Pls note that the above two answers are based on the equity method of investments. i.e. the net income of the Demo Co. is being added to the investment and dividends are deducted from the investment to arrive at the carrying value (c) What was Demo Co.'s total net income for the year? Demo Co.s total net income for the year is = $130,000 / Share of Gator Co. = $130,000 / 25% = $520,000 (d) What was Demo Co.'s total dividends for the year? Demo Cos total dividends for the year were as follows: -= $52,000 / 25% = $208,000...
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