Answer:
Investment in Coca-Cola FEMSA $1,409,800.00
Equity in income of Coca-Cola FEMSA $1,409,800.00
Explanation:
Coca-Cola Company share of Coca-Cola FEMSA reported income =
28% * $5,000,000= $1,400,000.00
Realized profit on intercompany sales = 28% * ($1,350,000 - ($1,350,000/1.35))= $98,000.00
Unrealized profit on intercompany sales = 28% * ($1,215,000 -($1,215,000/1.35)) = $88,200.00
Equity in Net Income of Coca-Cola FEMSA =
$1,400,000.00 + $98,000.00- $88,200.00 = $1,409,800.00
Journal entry:
Investment in Coca-Cola FEMSA $1,409,800.00
Equity in income of Coca-Cola FEMSA $1,409,800.00
