What is the equity in howell income


Acker Inc. bought 40% of Howell Co. on January 1, 2010 for $576,000. The equity method of accounting was used. The book value and fair value of the net assets of Howell on that date were $1,440,000. Acker began supplying inventory to Howell as follows:

Howell reported net income of $100,000 in 2010 and $120,000 in 2011 while paying $40,000 in dividends each year.

What is the amount of unrealized intra-entity inventory profit to be deferred on December 31, 2011?

What is the Equity in Howell Income that should be reported by Acker in 2010?

What is the balance in Acker's Investment in Howell account at December 31, 2010?

What is the Equity in Howell Income that should be reported by Acker in 2011?

 

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Accounting Basics: What is the equity in howell income
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