Equity Method Investment with Intercompany Sales and Profits The Coca-Cola Company owns 28 percent of...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Equity Method Investment with Intercompany Sales and Profits The Coca-Cola Company owns 28 percent of the voting stock of Coca-Cola FEMSA, acquired at book value. Assume that Coca-Cola FEMSA reports income of $5 million for 2016. Coca-Cola FEMSA regularly sells canned beverages to Coca-Cola at a markup of 35 percent on cost. During 2016 Coca-Cola FEMSAs sales to Coca-Cola totaled $25 million. Coca-Colas January 1, 2016, inventories include $1,350,000 purchased from Coca-Cola FEMSA. Coca-Colas December 31, 2016, inventories include $1,215,000 purchased from Coca-Cola FEMSA. Required Prepare the 2016 journal entry on Coca-Cola's books to recognize its income from Coca-Cola FEMSA under the equity method
Investment in Cokeacola Femsa DR: 1,409,800
Equity in Net Income of Cokeacola Femsa CR:1,409,800
Above is the answer to the question, could someone please provide me with a step by step explaination of how to work this?
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.