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    Accounting For Results Under The Equity Method

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    On January 1, 20xx, Orchid Corporation acquired 40 percent of the voting stock of Vose Corporation, an amount sufficient to exercise significant influence over Vose Corporation's activities, for $4,800,000 in cash. On December 31, Orchid determined that Vose paid dividends of $800,000 but incurred a net loss of $400,000 for 20xx. Prepare entries in T account form to reflect this information.

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    These entries are made under the Equity Method of accounting. Under this ...

    Solution Summary

    Using an Excel spreadsheet, this solution illustrates how to record the dividends and net loss of an investee on the investor's books using the equity method.