CASE A CASE B CASE C
P's ownership of S A 30% 405
investment in S - beg. of year $100 B $130
investment in S - end of year 105 128 C
S's income (loss) 100 90 40
S's dividends paid 80 30 20
In the equity method the investment account increases by the share of net income and decreases by the share of dividends.
Case A - Let A be the percentage holding. The investment account will increase ...
The solution explains how to solve for unknowns using equity method of accounting.