Exercise 121

Fill in the dollar changes caused in the Investment account and Dividend Revenue or Investment Revenue account by each of the following transactions, assuming Crane Company uses (a) the fair value method and (b) the equity method for accounting for its investments in Hudson Company

(a) Fair Value Mcthod (b) Equity Method Dividend Revenue Investment Investment Investment 1" At the beginning of Year 1, Crane bought 25% of Hudson's common stock at its book value. Total book value of all Hudson's common stock was $310,000 on this date 2. During Year 1, Hudson reported $56,000 of net income and paid $28,000 of dividends 3. During Year 2, Hudson reported $29,500 of net income and paid $20,000 of dividends. 4. During Year 3, Hudson reported a net loss of s9,000 and paid $4,000 of dividends. 2250 -1 Indicate the Year 3 ending balance in the Investment account, and cumulative totals for Years 1, 2, and 3 202500 11625 207625 18125 for dividend revenue and investment revenue Click if you would like to Show Work for this question: Open Show Work