Arbor corporation acquired 25% og Tree corporation's outstanding stock on
October 1,for $600,000.A summary of Tree's adjusted trial balances on this
date and at December 31 follows(in thousands):
December 31 October 1
Debits
current assets $ 500 $ 250
plant assets-net 1,500 1,550
expenses(including cost of goods sold) 800 600
dividends(paid in July) 200 200
------ ------
$3,000 $2,600
Credits
current liabilities $ 300 $ 200
capital stock(no change during the year) 1,000 1,000
retained earnings January 1 500 500
sales 1,200 900
------- -------
$3,000 $2,600
Arbor uses equity methd of accounting.No information is available concerning
the fair values of Tree's assets and liabilities.
Q:
Determine Arbor's investment income from Tree corporation for the year ended
December 31.
ANS:($300,000-100,000)*25%=$25,000
我想請問一下，為甚麼是這樣算呢?!!!
我實在想不通阿><
謝謝:)
--
All Comments