Matthew, Inc. owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee's operations and decision making. On January 1, 2018, the balance in the Investment in Lindman account is $348,000. Amortization associated with this acquisition is $16,900 per year. In 2018, Lindman earns an income of $98,000 and declares cash dividends of $49,000. Previously, in 2017, Lindman had sold inventory costing $29,400 to Matthew for $42,000. Matthew consumed all but 25 percent of this merchandise during 2017 and used the rest during 2018. Lindman sold additional inventory costing $46,200 to Matthew for $70,000 in 2018. Matthew did not consume 40 percent of these 2018 purchases from Lindman until 2019. What amount of equity method income would Matthew recognize in 2018 from its ownership interest in Lindman? What is the equity method balance in the Investment in Lindman account at the end of 2018?
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Matthew, Inc. owns 30 percent of the outstanding stock of Lindman Company and has the ability to significantly influence the investee's ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
A growling sound is heard from the rear of a rear-wheel-drive vehicle during cornering only. Technician A says that defective rear axle bearings may be the cause. Technician B says that defective drive pinion bearings may be the cause.
Answers (1)
A mercury manometer (/rhorho = 13,600 kg/m^3) is connected to an air duct to measure the pressure inside. The difference in the manometer levels is 30 mm, and the atmospheric pressure is 100 kPa.
Answers (1)
Why should job seekers read all (or most of) the ads in a newspaper?
Answers (1)
What method do most advertisers use in ads to persuade consumers to purchase their products?
Answers (2)
On January 1, 2018, Nana Company paid $100,000 for 6,900 shares of Papa Company common stock. The ownership in Papa Company is 10%. Nana Company does not have significant influence over Papa Company.
Answers (1)
New Questions in Business
In comparison to industry averages, Okra Corp. has a low inventory turnover, a high current ratio, and an average quick ratio. Which of the following would be the most reasonable inference about Okra Corp.? A. Its current liabilities are too low. B.
Answers (2)
The individual with the highest valuation of the good will win in which of the following auctions? A. Sealed Bid Auction B. English Auction C. Dutch Auction D. All of the above.
Answers (1)
Explain how banks can create money.
Answers (1)
A city acquires a 10-foot strip of a property owner's land for a public walking trail. the owner's home is not affected and she is able to use the land. is the homeowner eligible for compensation?
Answers (1)
A company uses the newsvendor model to manage its inventories and faces normally distributed demand with a coefficient of variation of 0.75. The company decides to order a quantity that exactly equals the mean of its demand forecast.
Answers (1)