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Summary Her Company purchased 48,000 common shares (20%) of Him Inc. on January 1, Year 4, for $81 $7.99   Add to cart
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Summary Her Company purchased 48,000 common shares (20%) of Him Inc. on January 1, Year 4, for $81
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Her Company purchased 48Her Company purchased 48,000 common shares (20%) of Him Inc. on January 1, Year 4, for $816,000. Additional information on Him for the three years ending December 31, Year 6, is as follows: Year Net Income Dividends Paid Market Value per Share at December 31 Year 4 $480,000 ...

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  • October 6, 2024
  • 3
  • 2024/2025
  • Summary

Subjects

  • year 4
  • for 816
  • year 6
  • her company purchased 48her company purchased 48
  • 000 common shares 20 of him inc on january 1
  • 000 additional information on him for the three y
  • is as follows year net income divi

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Her Company purchased 48,000 common shares (20%) of Him Inc. on January

1, Year 4, for $816,000. Additional information on Him for the three years

ending December 31, Year 6, is as follows: Year Net Income Dividends Paid

Market Value per Share at December 31 Year 4 $480,000 $360,000 $18 Year 5

540,000 384,000 20 Year 6 576,000 420,000 23 On December 31, Year 6, Her

sold its investment in Him for $1,104,000.




Answer & Explanation


To analyze Her Company's investment in Him Inc., we need to consider the

equity method of accounting, as Her Company owns 20% of Him Inc. This

method requires recognizing a share of the investee's net income and dividends

received.


Step-by-Step Analysis:


1. Initial Investment:

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