Balance in the investment account
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Young Co. acquired a 60% interest in Tomlin Corp. on December 31,
2003 for $630,000. During 2004, Tomlin had net income of $400,000
and paid cash dividends of $100,000. At December 31, 2004, the
balance in the investment account should be
a. $630,000.
b. $870,000.
c. $930,000.
d. $810,000.
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Solution Summary
The solution explains how to calculate the balance in the investment account
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Since the percentage holding is 60% we have to use the equity method of accounting. In equity method ...
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