%E10-15 (similar to) * Question Help Suppose that on January 6, 2018, Westfall Motors paid $420,000,000 for its 45% investment in Diesel Motors. Westfall has significant influence over Diesel after the purchase. Assume Diesel earned net income of $100,000,000 and paid cash dividends of $20,000,000 to all outstanding stockholders during 2018. (Assume all outstanding stock is voting stock.) Read the requirements Requirement 1. What method should Westfall Motors use to account for the investment in Diesel Motors? Give your reasoning Westfall Motors should use the equity method to account for its investment in Diesel Motors because the investment represents a 45% ownership of Diesel Motors and Westfall Motors has significant influence over Diesel Motors. Requirement 2. Journalize all required 2018 transactions related to Westfall Motors's Diesel investment. Include an explanation for each entry. (Record debits first, then credits. Select the explanation on the last line of the journal entry table. If no entry is required, select "No entry required" on the first line of the Accounts and Explanation column and leave the remaining cells blank.) Westfall Motors paid $420,000,000 for its 45% investment in Diesel Motors. Date Accounts and Explanation Debit Credit Requirements - X 2018 Jan. 6 420,000,000 Equity InvestmentsDiesel Motors Cash 420,000,000 1. What method should Westfall Motors use to account for the investment in Diesel Motors? Give your reasoning. 2. Journalize all required 2018 transactions related to Westfall Motors's Diesel investment. Include an explanation for each entry. 3. Post all 2018 transactions to the investment T-account. What is its balance all the transactions are posted? How would this balance be classified on the balance sheet dated December 31, 2018? Purchased investment in stock (equity method). Diesel paid cash dividends of $20,000,000 to all outstanding shareholders during 2018. Date Accounts and Explanation Debit Credit 2018 Print Done Choose from any list or enter any number in the input fields and then click Check Answer. parts remaining Clear All Check