• On 1/1/20X1, Illini Company acquires 40% of Raven's capital stock for $20,000. The investment gives Illini the ability to exercise significant influence over Ravens operations. Raven's net income for the year 20X1 is $10,000. On 12/31/20X1, the investment has a fair value of $18,000. During 20X1, Raven declares and pays a dividend of $5,000 to all shareholders. On 5/1/20X2, Illini sells the securities for $20,000.

Project 1.3 Part 3 Balance Sheet

Date	Account Name		Debit	Credit
1/1/20X1	Investment-equity method		[A]
		Cash		[B]
20X1 dividends:	Cash		[C]
		Investment-equity method		[D]
20X1 net income:	Investment-equity method		[E]
		Investment revenue		[F]
5/1/20X2	Cash		[G]
	Loss		[H]
		Investment-equity method		[I]