Accounting & the 3 Statements
You own 25% of an investee (equity method). It earns $200 of net income and pays $80 of total dividends this year. Walk me through your three statements (ignore taxes).
Model answer
Income statement: pick up your share of earnings — 25% × $200 = +$50 of 'equity in earnings of affiliates' (one line, below operating income) → net income +$50. Cash flow statement: start at NI +$50;…
The full, human-reviewed answer is in the bank.
Sign up free and Daily 10 serves you 10 questions a day from all 1,500+ — or go Pro for unlimited reps.
More from Accounting & the 3 Statements
- What are the three financial statements and what does each show?
- Walk me through how a $10 increase in depreciation flows through the three statements (40% tax).
- How are the three statements linked?
- A company buys $100 of inventory on credit (no cash yet). Walk through the three statements.
- Why can a profitable company still run out of cash?
- What's the difference between cash-based and accrual accounting?