1) On January 2, 2023, Black Corporation paid $350,000 to purchase 30% of the outstanding voting...

 

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1) On January 2, 2023, Black Corporation paid $350,000 to purchase 30% of the outstanding voting shares of White Corporation. The equity method is used to account for the investment because Black exercises significant influence over White. The following data relate to this investment: 2023 . . 2024 . . $20,000 in White Corporation dividends were received by Black Corporation. $290,000 of income was reported by White Corporation. Current market value of White Corporation investment at the end of the year was $365,000. . $30,000 in White Corporation dividends were received by Black Corporation. $320,000 of income was reported by White Corporation. Current market value of White Corporation investment at the end of the year was $430,000. 2025 The investment was sold on January 3, 2022, for $430,000. a) What was the balance in the investment account at the end of 2023 and 2024? b) What entry was made to record the sale of the investment on January 3, 2025? 1) On January 2, 2023, Black Corporation paid $350,000 to purchase 30% of the outstanding voting shares of White Corporation. The equity method is used to account for the investment because Black exercises significant influence over White. The following data relate to this investment: 2023 . . 2024 . . $20,000 in White Corporation dividends were received by Black Corporation. $290,000 of income was reported by White Corporation. Current market value of White Corporation investment at the end of the year was $365,000. . $30,000 in White Corporation dividends were received by Black Corporation. $320,000 of income was reported by White Corporation. Current market value of White Corporation investment at the end of the year was $430,000. 2025 The investment was sold on January 3, 2022, for $430,000. a) What was the balance in the investment account at the end of 2023 and 2024? b) What entry was made to record the sale of the investment on January 3, 2025?

Answer rating: 100% (QA)

a Balance in the Investment Account End of 2023 Initial Investment 350000 Income Reported 290000 Div... View the full answer