On January 1 2017 Mink Company purchased 5000 shares of Kusher Company stock for $360000. Mink's investment represents 30 percent of the total outstanding shares of Kusher. During 2017 Kusher paid total dividends of $100000 and reported net income of $300000. What revenue does Mink report related to this investment and what is the amount to be reported as an investment in Kusher stock at December 31?

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Rhonda Littles · Accepted Answer

Final Answer :   Revenue for 2017 ( $ 300 , 000 × . 30 ) $ 90 , 000  Balance in Investment account   Purchase price $ 360 , 000 Less dividend receipt  ( $ 100 , 000 × . 30 )   − 30 , 000  Plus investment revenue  ( $ 300 , 000 × . 30 ) + 90 , 000  Ending balance Investment in Kusher $ 420 , 000 \begin{array}{llr}	ext { Revenue for 2017 (\$ 300,000 	imes .30) } & \$90,000\\	ext { Balance in Investment account }\  	ext {  Purchase price}  & \$360,000\ 	ext {Less dividend receipt   (\$ 100,000 	imes .30)    }  & -30,000\ 	ext {  Plus investment revenue   (\$ 300,000 	imes .30)  }  & +90,000\ 	ext {  Ending balance Investment in Kusher}  & \$420,000\\end{array}  Revenue for 2017 ( $300 , 000 × .30 )  Balance in Investment account   Purchase price Less dividend receipt  ( $100 , 000 × .30 )    Plus investment revenue  ( $300 , 000 × .30 )  Ending balance Investment in Kusher ​ $90 , 000 $360 , 000 − 30 , 000 + 90 , 000 $420 , 000 ​

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