Question

question 8
5 pts
nestlé owns 23.4% of loréal, which reported chf 3,992m in net income and chf 2,321m in dividends. what amount should nestlé recognize as \equity in earnings of associates\?

chf 543 million

chf 934 million

chf 2,321 million

chf 3,992 million

none of the answers is correct

Explanation:

Step1: Identify the formula

Equity - in - earnings of associates = Percentage ownership×Net income of associate

Step2: Substitute the values

Nestlé's ownership percentage = 23.4%=0.234, L'Oréal's net income = CHF 3,992M
Equity - in - earnings of associates = 0.234×3992
$0.234\times3992 = 934.128\approx934$ (rounded to the nearest whole number)

Answer:

CHF 934 million