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Unformatted text preview: 3. 20% x net income for the year 4. 460 [340 + (40 + 45 +48) (30 + 32 + 35)] = 84 5. 20,000 x 23 340,000 = 120,000 (c) The total income over the three-year period is the same for all four situations. This is not unusual in accounting. Although the different methods report different income each year, in the long run, the income is the same under all methods. The total income is usually equal to the difference between cash received and cash paid over the life of the investment which is $217,000 calculated as follows: Cash received Proceeds from sale 460,000 Dividends received (30 + 32 + 35) 97,000 Total proceeds 557,000 Cash disbursed Cost of investment 340,000 Change in cash 217,000...
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This note was uploaded on 02/19/2012 for the course ACCT 4443 taught by Professor Young during the Spring '12 term at Saint Mary's University Texas.
- Spring '12