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    Investment in Associate - Equity Method

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    On January 1, 2008, Jonsey Corporation purchased 30% of the common stock outstanding of Karsen Corporation for $200,000. During 2008, Karsen Corporation reported net income of $80,000 and paid cash dividends of $40,000. The balance of the Stock Investments-Karsen account on the books of Jonsey Corporation at December 31, 2008 is

    a. $200,000.
    b. $240,000.
    c. $280,000.
    d. $212,000.

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    Solution Summary

    The solution computes Investment balance in associate by a company in its books.