Phillips owns 37 % of Mintor, Inc. (a private company). In 2007, Mintor had sales of $22,00,000, had net income of $82,0...
Phillips owns 37 % of Mintor, Inc. (a private company). In 2007, Mintor had sales of $22,00,000, had net income of $82,000 and Mintor paid $32,000 in dividends. If Phillips uses the Equity Income method, what did Phillips record as Equity Income on its 2007 income statement?
Homework Answers
Answer:
Equity Income Phillips record in its 2007 income statement = Net Income of Mintor * % ownership
= $82,000 * 37%
= $30,340.
Journal entries to record receipt of dividend and equity income are as follows:
Equity Income Phillips record in its 2007 income statement = $30,340.
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