Question: On January 1 , 2 0 2 4 , Ruark Corporation acquired a 4 0 percent interest in Batson, Inc., for $ 2 1 0

On January 1,2024, Ruark Corporation acquired a 40 percent interest in Batson, Inc., for
$210,000. On that date, Batsons balance sheet disclosed net assets of $360,000. During 2024,
Batson reported net income of 80,000 and paid cash dividends of $25,000. Ruark sold inventory
costing $30,000 to Batson during 2024 for $40,000. Batson used all of this merchandise in its
operations during 2024.
Prepare all of Ruarks 2024 journal entries to apply the equity method to this investment.

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