On January 1, 2018, an investor company acquired 30% of an investee company's common stock for $600,000.
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Question:
On January 1, 2018, an investor company acquired 30% of an investee company's common stock for $600,000. As a result of this transaction, the investor can exert significant influence over the investee. During each year ended December 31, 2018 and 2019 the investee reported $120,000 of net income and $50,000 of dividends. On January 1, 2018, the book value of the investee's net assets was $2,000,000 and all individual net assets had appraised fair values that equaled their reported book values. On December 31, 2019, what is the balance of the Equity Investment account on the Investor's balance sheet?
a. $621,000
b. $642,000
c. $740,000
d. $600,000
Related Book For
Advanced Accounting
ISBN: 978-1259444951
13th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupni
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