CosttoEQUITYCompleted

CosttoEQUITYCompleted - $750,000 Additional Cost $3,995,000...

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Cost Method followed by Mark-to-Market for Available-for-Sale Security: Historic Cost Fair Value Fair Value $340,000 $510,000 $820,000 1/2 2010 Unrealized Gain $170,000 in OCI 12/31 2010 Unrealized Gain $310,000 in OCI   Reverse 12/31 2011 12/31 2012 Dividend Revenue $50,000 5% X $1,000,000 2010 Dividend Revenue $100,000  Reverse 5% X $2,000,000 2011 2012 Equity in Net Earnings of Silver $140,000 5% X $2,800,000 Dividend Received $50,000 Equity in Net Earnings of Silver $205,000 5% X $4,100,000 Dividend Received $100,000 Equity in Net Earnings of Silver $1,330,000 25% X $5,320,000 Dividend Received $750,000 25% X $3,000,000 $340,000 + $140,000   $50,000 Dividends = $430,000 + $205,000   $100,000 Dividends $535,000 + $2,880,000 + $1,330,000 
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Unformatted text preview: $750,000 Additional Cost $3,995,000 Historic Cost 5% Ownership Carrying Value 5% Ownership Carrying Value 25% Ownership Carrying Value Reported in 2012 Comparative Financials Equity Method Retrospectively Applied: Cumulative Effect Adjustment to Beginning R/E of the earliest year presented to Retrospectively Apply the Equity Method (ignores tax effect) $90,000 $340,000 Historic Cost vs. $430,000 Equity Method Carrying Value Cumulative Effect Adjustment to Beginning AOCI of the earliest year presented to Retrospectively Apply the Equity Method (ignores tax effect) $(170,000) 170,000 FV Adjustment reversed from AOCI $510,000 FV...
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