On 1/1/xx, Company A purchases 100% of Company B for $100,000 cash. On 12/31/xx, Company B realizes profit of $20,000 and pays dividends of $5,000.

Using the ACT470_Mod01-Option01.xlsx Excel spreadsheet in the Module 1 folder, you are to:

1. Prepare all required entries for Company A associated with the above activities utilizing the equity method.
2. Determine the balance in Company As investment account at the end of the year. Highlight the 12/31/xx balance in yellow.

ACT470-Module 1-Option 1
	Account	DR	Cr
1/1/xx	Investment
	Cash
12/31/xx	Investment
	Equity income
	Cash
	Investment
Investment Account Balance:
			Amount
1/1/xx Balance
Additions:
Deductions:
(express as negative)
12/31/xx Balance			0