Question

equity method to account for inOn January 1 of the current​ year, Beta Company paid​ $200,000 for shares of Gamma Company common stock. Beta owns​ 10% of Gamma Company. Gamma reported net income of for December 31 of the current year. The fair value of the Gamma stock on that date was . What amount will be reported in​ Beta's balance sheet for the investment in Gamma at December​ 31?vestments

Answer 1

Answer:

$270,000

Explanation:

Calculation to determine What amount will be reported in Beta's balance sheet for the investment in Gamma at December 31

Using this formula

December 31 Investment in Gamma= Shares of Gamma*Fair value of the Gamma stock

Let plug in the formula

December 31 Investment in Gamma = 10,000 shares*$27

December 31 Investment in Gamma = $270,000

Therefore The amount that will be reported in Beta's balance sheet for the investment in Gamma at December 31 is $270,000