Hartman Company acquired 35% of the voting stock of Zhou Company for $90 million cash. In year

Question:

Hartman Company acquired 35% of the voting stock of Zhou Company for $90 million cash. In year 1, Zhou had a net income of $50 million and paid cash dividends of $30 million.

Prepare a tabulation that uses the equity method of accounting for Hartman’s investment in Zhou. Show the effects on the balance sheet equation. What is the year-end balance in the Investment in Zhou account under the equity method?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...