in Ramona Company was $410,000. A) Assume Brankov Company owns 10% of the shares of Ramona Company. Brankov Company considers the investment to be available-for-sale securities. Show the effects of the transactions above on the accounts of Brankov Company using the balance sheet equation. B) Assume Brankov Company owns 25% of the shares of Ramona Company. Show the effects of the transactions above on the accounts of Brankov Company using the balance sheet equation.
in Ramona Company was $410,000. A) Assume Brankov Company owns 10% of the shares of Ramona Company. Brankov Company considers the investment to be available-for-sale securities. Show the effects of the transactions above on the accounts of Brankov Company using the balance sheet equation. B) Assume Brankov Company owns 25% of the shares of Ramona Company. Show the effects of the transactions above on the accounts of Brankov Company using the balance sheet equation.
Chapter20: Financing With Derivatives
Section: Chapter Questions
Problem 7P
Related questions
Question
![Brankov Company purchased common stock in Ramona Company for
$400,000. In the current year, Ramona Company reported net income of $50,000 and
paid a dividend of $32,000. At the end of the year, the market value of the investment
in Ramona Company was $410,000. A) Assume Brankov Company owns 10% of the
shares of Ramona Company. Brankov Company considers the investment to be
available-for-sale securities. Show the effects of the transactions above on the
accounts of Brankov Company using the balance sheet equation. B) Assume
Brankov Company owns 25% of the shares of Ramona Company. Show the effects
of the transactions above on the accounts of Brankov Company using the balance
sheet equation.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F620667c4-dc95-47b1-98cc-61ec8debe4a0%2F879a09b2-5d78-4547-929e-e4473ecf541b%2F5jbb10s_processed.png&w=3840&q=75)
Transcribed Image Text:Brankov Company purchased common stock in Ramona Company for
$400,000. In the current year, Ramona Company reported net income of $50,000 and
paid a dividend of $32,000. At the end of the year, the market value of the investment
in Ramona Company was $410,000. A) Assume Brankov Company owns 10% of the
shares of Ramona Company. Brankov Company considers the investment to be
available-for-sale securities. Show the effects of the transactions above on the
accounts of Brankov Company using the balance sheet equation. B) Assume
Brankov Company owns 25% of the shares of Ramona Company. Show the effects
of the transactions above on the accounts of Brankov Company using the balance
sheet equation.
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