Loading...
CFA Level 2
Financial Reporting and Analysis

Equity Method Share of Income Calculation

Very Easy Intercorporate Investments Equity Method

XYZ Corporation has significant influence over ABC Inc. due to its 30% ownership stake. XYZ uses the equity method to account for its investment in ABC. During the year, ABC reported a net income of $1 million and paid dividends of $200,000. Under the equity method, how much should XYZ Corporation recognize as its share of ABC's income?

Hint

Submitted9.8K
Correct8.2K
% Correct84%