value 10.00 polnts Kim Company bought 30% of the shares of Phelps, Inc , at the

Question

value 10.00 polnts Kim Company bought 30% of the shares of Phelps, Inc , at the start of 2016 Kim pad S24 million for the shares. Thirty percent of the book value of Phelps's net assets is $15 milion, and the difference of $9 million is due to land that Phelps owns that has appreciated in value. During 2016, Phelps reported net income of $7 million and paid a cash dividend of $6.3 million What amount does Kim carry the Phelps investment on its balance sheet as of December 31, 2016? Enter your answers in millions rounded to 2 decimal places (i.e, 5,500,000 should be entered as 5.50)) reportedìnKimbalancesheet rmillion] Am untot investment References eBook & Resources Learning Objective: 12-06 Explain the adjustm the equity method when the fair value of the n underlying an investment exceeds their book acquisition Worksheet Difficulty: 2 Medium Learning Objective. 12-08 Discuss the primary between U S. GAAP and iFRS with respect to in MD

Explanation / Answer

Value of investment calculation

Particulars Amount Acquistion price $                            24.00 Add: Equity income (7*30%) $                              2.10 Less: dividend (6.3*30%) $                            (1.89) Investment as on Dec 31 2016 $                            24.21

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