Madison Corporation purchases an investment in Lake Geneva, Inc. at a purchase price of $20 million cash, representing 40% of the book value of Lake Geneva, Inc. During the year, Lake Geneva reports net income of $3,400,000 and pays $838,000 of cash dividends. At the end of the year, the market value of Madison’s investment is $24 million.

What is the year-end balance of the equity investment in Lake Geneva? 

Answer rating: 100% (QA)

To find the yearend balance of the equity investment in Lake Geneva Inc we need to start with the in... View the full answer