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Jack Corporation purchased a 20% interest in Jill Corporation for $1,780,000 on January 1, 2018. Jack can significantly influence Jill. On December 10, 2018, Jill declared and paid $2.4 million in dividends. Jill reported a net loss of $5.4 million for the year. What amount of loss should Jack report in its income statement for 2018 relative to its investment in Jill?

Respuesta :

Answer:

$1,560,000

Explanation:

The computation of the amount of loss related to the investment is shown below:

= Net loss × interest percentage + dividend paid ×  interest percentage

= $5,400,000 × 20% + $2,400,000 × 20%

= $1,080,000 + $480,000

= $1,560,000

We simply added the net loss and the dividend with their interest percentage so that the correct amount can come

All other information which is given is not relevant. Hence, ignored it

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