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Equity Method On January 1, 2014, The Miller Corporation purchased 300,000 shares of The Mayfair Corporation...

Equity Method

On January 1, 2014, The Miller Corporation purchased 300,000 shares of The Mayfair Corporation for $5.7 million. The investment represented 25 percent of The Mayfair Corporation’s outstanding common shares.

During 2014, Mayfair reported net earnings of $2.25 million and paid a cash dividend of $0.15 per share. During 2015, Mayfair reported a net loss of $180,000 and again paid a dividend of $0.15 per share.

Calculate the book value of Miller’s investment in Mayfair as of December 31, 2014, and December 31, 2015.

2014 $Answer
2015 $Answer
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