[会计学原理英文课件12.ppt

* * * * * When Purchase Dr. Investment in associated companies (A) Cr. Cash (A) When investee reports income Dr. Investment in associated companies (A) Cr. Equity in earnings of associated co. (R,SE) When investee reports loss Dr. Equity in loss of associated companies (R,SE) Cr. Investment in associated companies (A) When receive dividend Dr. Cash (A) Cr. Investment in associated companies (A) Investments For Significant Influence: Equity Method Evaluation only. Created with Aspose.Slides for .NET 3.5 Client Profile . Copyright 2004-2011 Aspose Pty Ltd. Evaluation only. Created with Aspose.Slides for .NET 3.5 Client Profile . Copyright 2004-2011 Aspose Pty Ltd. Investments For Significant Influence: Equity Method On January 2, TeleCom, Inc. acquires a 30% interest in S at a cost of $2,000,000. Prepare the journal entry to record TeleCom’s investment. Evaluation only. Created with Aspose.Slides for .NET 3.5 Client Profile . Copyright 2004-2011 Aspose Pty Ltd. Evaluation only. Created with Aspose.Slides for .NET 3.5 Client Profile . Copyright 2004-2011 Aspose Pty Ltd. TeleCom credits Equity in Investee Earnings (an income statement account) for its share of S’s earnings. Investments For Significant Influence: Equity Method S net income for the year is $1,600,000. TeleCom’s 30% share is $480,000. Record TeleCom’s share of S’s income. Evaluation only. Created with Aspose.Slides for .NET 3.5 Client Profile . Copyright 2004-2011 Aspose Pty Ltd. Evaluation only. Created with Aspose.Slides for .NET 3.5 Client Profile . Copyright 2004-2011 Aspose Pty Ltd. Dividends are not revenue under the equity method. They are treated as a reduction of the investment account. Investments For Significant Influence: Equity Method On March 31 of the next year, S pays $200,000 in dividends, $60,000 (30%) of which goes to TeleCom. Record TeleCom’s receipt of the dividend. Evaluation only. Created with Aspose.Slides for .NET 3.5 Client Profile . Copyright 2004