GM506-01N – Equity Method for Minority, Active Investments. U.S. GAAP
January 3rd, 2018
Equity Method for Minority, Active Investments. U.S. GAAP requires firms to account for equity investments in which ownership is between 20% and 50% using the equity method. Ace Corporation owns 35% of Spear Corporation during 2014. Spear Corporation reported net income of $100.4 million for 2014 and declared and paid dividends of $25 million during the year. Support your answers with calculations.Calculate the equity income that Ace Corporation reports in 2014 related to its ownership in Spear Corporation