Agani Financial paid $570,000 for a 45% investment in the common stock of Sonic, Inc. For the first year, Sonic reported net income of $260,000 and at year end declared and paid cash dividends of $135,000. On the balance-sheet date, the fair value of Agani "s investment in Sonic stock was $430,000?
Requirements
1. Which method is appropriate for Agani Financial to use in its accounting for its investment in Sonic, Inc.? Why?
2. Show everything that Agani would report for the investment and any investment revenue in its year-end financial statements?