1. Generally, and considering the facts in the case below:
   1. When investor level of ownership falls below that necessary for use of the equity method (e.g. 20%), what changes take place? (Hints: Does the company change its method for accounting for the investment? If so, how? Is the treatment retrospective or prospective?)
   2. What happens at the next reporting date? (Hint: What is the accounting treatment for this investment at the next balance sheet date?)
2. Specifically, based on the framework provided by the answers in part (1), and the details in the case below, what is reported on the balance sheet and income statement for Butch Co. at 12/31/2019?

Butch Co. was a 30% owner of Sundance Corp., holding 210,000 shares of Sundances common stock on December 31, 2018. The investment account had the following entries:

Investment in Sundance Corp.
1/1/17 Cost	3,180,000	12/6/17 Dividend Received	150,000
12/31/17 Share of Income	390,000	12/5/18 Dividend Received	240,000
12/31/18 Share of Income	510,000

On January 2, 2019, Butch sold 126,000 shares of Sundance for $3,440,000, thereby losing its significant influence. During the year 2019, Sundance experienced the following results of operations and paid the following dividends to Butch.

2019	Sundance Income (Loss)	Dividends paid to Butch
	$1,480,000	$50,400

At December 31, 2019, the fair value of Sundance shares held by Butch is $375,000. This is the first reporting date since the January 2 sale.