Fill in the dollar changes caused in the investment account and dividend revenue or investment...
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Accounting
Fill in the dollar changes caused in the investment account and dividend revenue or investment revenue account by each of the following transactions, assuming Crane company uses (a) the fair value method and (b) the equity method for accounting for its investments in Hudson Company.
(a) Fair Value Method (b) Equity Method
Investment Dividend Investment Investment
Account Revenue Account Revenue
Transactions
1. At the beginnig of year 1, Crane bought
25% of Hudson's common stock at its book
value. Total book value of all Hudson's
common stock was 4800,000 on this date.
2 .During year 1, Hudson reported $60,000 of
net income and paid 430,000 of dividends
3. During year 2, Hudson reported $30,000 of
net income and paid $20,000 of dividends
4. During Year 3, Hudson reported a net loss
of $10,000 and paid $4,000 of dividends
5. Indicate the Year 3 ending balance in the
Investment account, and cumulative totals
for Year 1, 2, and 3 for dividend revenue
and investment revenue.
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