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(b) Red Ltd purchased 25% of the shares in Green Ltd on 1 January 2020 for $300,000. During the year Green Ltd announced a net

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(b) Red Ltd purchased 25% of the shares in Green Ltd on 1 January 2020 for $300,000. During the year Green Ltd announced a net profit of $120,000 and declared and paid dividends of $80,000. If Red Ltd accounted for the investment in Green Ltd using the equity method what would be the balance of the investment on the balance sheet as at 31 December 2020. [2 mark]

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