On January 1, 2019, Snow Corporation purchased 20% of the 200,000 outstanding shares of common stock of Garvey Company for $4.00 per share as a long-term investment. The purchase price of the shares was equal to their book value. The following information is available about Garvey for 2019 and 2020:

Required:
1. Prepare journal entries to record this information, assuming:
a. Snow accounts for the investment as an equity security for which it does not have significant influence.
b. Snow uses the equity method.
2. Assume 10,000 of the Garvey shares are sold on January 4, 2021, by Snow for $4.30 per share. Prepare the journal entry for this sale, assuming:
a. Snow accounts for the investment as an equity investment for which it does not have significant influence.
b. Snow uses the equity method.

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End of 2019 Reported net income Cash dividends declared and paid Market value of shares Reported net income Cash dividends declared and paid Market value of shares $80,000 $30,000 $3.80 per share $90,000 $35,000 $4.25 per share End of 2020