Equity method mechanics An investor owns 25% of the outstanding common stock of an investeecompany..

 
   

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Equity method mechanics
An investor owns 25% of the outstanding common stock of an investeecompany. The Equity Investment was reported at $500,000 as of theend of the previous year. During the year, the investee paysdividends of $50,000 to the investor. The investee reports thefollowing income statement for the year: