EQUITY METHOD ACCOUNTING

Question 1

most important when calculating income or paid dividend under equity method.

Answer 1

only account for your share of income and dividend, DO NOTAKE INTO CONSIDERATION WHOLE INCOME. VERY COMMON MISTAKE.

Question 2

WHILE CALCULATING NET INCOME PLS REMEMBER

Answer 2

IF ANY CUMULATIVE PREFERRED STOCK IS THER, FIRST DEDUCT THAT PREFRED DIVIDEND FROM NET INCOME AND THEN CONSIDER YOUR SHARE OF INCOME