Ask Question
8 January, 12:53

Winston Corporation owns 25% of the voting stock of Tole Corporation and uses the equity method in recording the investment. Tole Corporation reported a $50,000 net loss. Winston Corporation's entry would include a

a. debit to the investment account for $50,000.

b. debit to the cash account for $12,500.

c. debit to the investment account for $12,500.

+3
Answers (1)
  1. 8 January, 16:20
    0
    c. debit to the investment account for $12,500.

    Explanation:

    The computation is shown below:

    = Net loss reported * owning percentage

    = $50,000 * 25%

    = $12,500

    Simply we multiplied the reported net loss and its owning percentage so that the accurate loss amount can come

    Since it is a net loss, so it would be debited to the investment account for $12,500

    Hence, all other options are wrong except option c.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Winston Corporation owns 25% of the voting stock of Tole Corporation and uses the equity method in recording the investment. Tole ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers