Mehan Incorporated- balance in the investment account at December 31, 2010( with explanation)
On January 1 2010, Mehan, Incorporated purchased an additional 25,000 sharers (25%) of cook for $300,000. This last purchase gave Mehan the ability to apply significant influence over cook. The book value of cook on january1, 2010, was $1,000,000. The book value of cook on January 1, 2011, was $1,150,000. Any excess of cost over book value for this second transaction is assigned to a database and amortized over five years.
Cook reports net income and dividends as follows. These amounts are assumed to have occurred evenly throughout the years:
Net income Dividends
2010 $200,000 $50,000
2011 225,000 50,000
2012 250,000 60,000
On April 1 2012, just after its first dividend receipt, Mehan sells 10,000 shares of its investment. How much income did Mehan report from cook during 2010?Order Now