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Orange Company owns 2 0 % of Blue Company, and accounts for its investment using the equity method. On the date of acquisition, the fair
Orange Company owns of Blue Company, and accounts for its investment using the equity method. On the date of acquisition, the fair values of Blue's net assets equaled book values. At the beginning of XX the Equity Investment was reported on Orange's balance sheet at $ During XX Blue reported net income of $ and paid dividends of $ During XX Blue reported net income of $ and paid dividends of $ In XX Orange sold inventory to Blue, realizing a gross profit of $ on the sale. At the end of XX of the inventory remained unsold by Blue. In XX Blue sells the inventory from the XX intercompany transaction to an unaffiliated party. Provide Equity Income ending balance in Equity Investment for both years.
XXXX
Equity Income $
Equity Investmwnt $
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