Use the following information from Blue-Cross Inc 2014 annual report to calculate the dividend yield on common stock and the payout ratios. Then comment on the results.
2014 2013 2012
Earnings per share $1.22 $1.53 $1.90
Dividends per share 1.29 1.52 1.48
Stock price per common $20.31 $37.63 $44.19
Question
Safeway Company acquired 75 percent of the outstanding voting common stock of Giant Company for $1,444,800 cash on January 1, 2011. The investment is accounted for under the equity method. During 2011, 2012, and 2013, Giant Company reported the following:
Year Net income/(loss) Dividends Paid
2011 $357,840 $290,640
2012 ($45,360) -0-
2013 $108,360 $72,240
Prepare general journal entries to record the investment and the effect of the subsidiary’s income, losses, and dividends on Safeway Company’s accounts
Compute the balance in the investment account as of December 31, 2013.