Analyzing and Interpreting Equity Method Investments
Concord Company purchases an investment in Bloomingdale Company at a purchase price of $2.5 million cash, representing 30% of the book value of Bloomingdale. During the year, Bloomingdale reports net income of $450,000 and pays cash dividends of $110,000. At the end of the year, the market value of Concord’s investment is $2.8 million.
a. What amount does Concord report on its balance sheet for its investment in Bloomingdale?
b. What amount of income from investments does Concord report? $