Time Company

Time Company purchased 40,000 of the 100,000 outstanding shares of Tiny Company for $2,000,000.  Time has significant influence over Tiny and will account for this investment using the equity method.  During the year, Tiny declared dividends of $140,000 and reported Net Income of $800,000.  What is the balance in the Investment in Tiny account at year-end? Holding in Tiny Company == 40000 / 10000040.00% Net Income of TimeShare of Tiny === 800000800000 x 40%320,000 Dividend declaredShare of Tiny === 140000140000 x 40%56,000 Balance in…

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