On January 1, 20X6, Synthetic Inc. (SI) paid $300,000 cash to acquire 30% of the  common shares of Organic Inc. (OI). At the time of acquisition, the carrying value of  OI’s common shares was $200,000, and its retained earnings were $300,000. The fair values of the INA approximated their carrying values except for a building whose  fair value was $100,000 higher than its carrying value. The building has a 20-year  remaining useful life, and straight-line depreciation is used.  On the acquisition date (January 1, 20X6), SI sold equipment to OI. OI paid cash of  $260,000 for the equipment. The equipment had a book value of $200,000 at the  time of sale. The remaining useful life of the equipment is estimated to be five years;  the estimated residual value is $0. Both companies depreciate equipment on a  straight-line basis and have a December 31 year end. They both pay income tax at a  rate of 20%. OI reported net income of $80,000 in 20X6, and declared and paid dividends of  $20,000 on its common shares. What amount would be reported in SI’s investment in OI account at December 31,  20X6, assuming that the equity method is used?

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Investment in Associates AC DEBIT CREDIT DATE PARTICULARS AMOUNT DATE PARTICULARS AMOUNT Jan 12016 T... View the full answer