2. Investments:

On January 1, 2020, Selus paid $20 million for a 40% investment in ABC Ltd. ABC reported a net income of $8 million and paid cash dividend of $2 million during 2020.

1. What method should Selus use to account for the investment in ABC? Briefly explain the method.

2. Journal the three transactions required for Selus (in millions, i.e. write 25 if it is 25 million, do not write 25,000,000).

Accounts Debit Credit Investment in ABC Ltd. ABC Ltd. reported net income ABC Ltd. paid dividends 3. What is the investment balance as of December 31, 2020?

4. Assume Selus sold its investment in ABC for $20 million. Journalize the transaction (in millions, i.e. write 25 if it is 25 million, do not write 25,000,000).