Question
On January 1, 20X1, ABC Corp purchased 25.37% of the common shares of XYZ inc for $99,289. The investment is reported using the equity method,
On January 1, 20X1, ABC Corp purchased 25.37% of the common shares of XYZ inc for $99,289. The investment is reported using the equity method, as ABC has significant influence over XYZ. XYZ reported net income and dividends of $49,645 and $19,855 respectively for the fiscal year 20X1. For the fiscal year 20X2, XYZ reported net income and dividends of $69,499 and $79,445 respectively. Calculate the balance of 'Investment in XYZ' account on ABC's balance sheet on December 31, 20X1. Assume both companies have a December 31 fiscal year end. a. $101,504 b. $104,176 c. $96,162 d. $98,833 e. $106,847
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