Johnstone Company owns 10,000 shares of Breva Corporation’s stock; Breva currently has 40,000 shares outstanding. During the year, Breva had net income of $200,000 and paid $160,000 in dividends. At the beginning of the year, there was a balance of $150,000 in Johnstone’s equity method investment in Breva Corporation account. At the end of the year, the balance in this account should be
Johnstone holds 25% (10,000 ÷ 40,000) of Breva’s voting common stock. Under the equity method, (1) an investor recognizes its share of the investee’s net income as an increase in the investment account:
Investment in Breva ($200,000 × 25%): $50,000
Income -- equity-method investee: $50,000

(2) a dividend from the investee is treated as a return of an investment:
Cash ($160,000 × 25%): $40,000
Investment in Breva: $40,000

Thus, at the end of the year, the balance in the investment in Breva account is $160,000 ($150,000 + $50,000 – $40,000).

Instructions: use the following information to construct the 2000 balance sheet and income statement for carolina business machines. round all numbers to the nearest whole dollar. all numbers are in thousands of dollars. be sure to read the whole problem before you jump in and get started. at the end of 1999 the firm had $43,000 in gross fixed assets. in 2000 they purchased an additional $14,000 of fixed asset equipment. accumulated depreciation at the end of 1999 was $21,000. the depreciation expense in 2000 is $4,620. at the end of 2000 the firm had $3,000 in cash and $3,000 in accounts payable. in 2000 the firm extended a total of $9,000 in credit to a number of their customers in the form of accounts receivable. the firm generated $60,000 in sales revenue in 2000. their cost of goods sold was 60 percent of sales. they also incurred salaries and wages expense of $10,000. to date the firm has $1,000 in accrued salaries and wages. they borrowed $10,000 from their local bank to finance the $15,000 in inventory they now have on hand. the firm also has $7,120 invested in marketable securities. the firm currently has $20,000 in long-term debt outstanding and paid $2,000 in interest on their outstanding debt. over the firm's life, shareholders have put up $30,000. eighty percent of the shareholder's funds are in the form of retained earnings. the par value per share of carolina business machines stock is

In each of the following cases, find the unknown variable. ignore taxes. (do not round intermediate calculations and round your answers to the nearest whole number, e. g., 32.) accounting unit price unit variable cost fixed costs depreciation break-even 20,500 $ 44 $ 24 $ 275,000 $ 133,500 44 4,400,000 940,000 8,000 75 320,000 80,000

Russell's is considering purchasing $697,400 of equipment for a four-year project. the equipment falls in the five-year macrs class with annual percentages of .2, .32, .192, .1152, .1152, and .0576 for years 1 to 6, respectively. at the end of the project the equipment can be sold for an estimated $135,000. the required return is 13.2 percent and the tax rate is 23 percent. what is the amount of the aftertax salvage value of the equipment assuming no bonus depreciation is taken