Question
The summarized balance sheets of Busby Company and Big Horn Company as of December 31, 2020 are as follows: Busby Company Balance Sheet December 31,
The summarized balance sheets of Busby Company and Big Horn Company as of December 31, 2020 are as follows: Busby Company Balance Sheet December 31, 2020 Assets $3,000,000 Liabilities $ 800,000 Capital stock 1,500,000 Retained earnings 700,000 Total equities $3,000,000 Big Horn Company Balance Sheet December 31, 2020 Assets $2,200,000 Liabilities $600,000 Capital stock 780,000 Retained earnings 820,000 Total equities $2,200,000 17) If Busby Company acquired a 20% interest in Big Horn Company on December 31, 2020 for $550,000 and the fair value method of accounting for the investment were used, the amount of the debit to Equity Investments (Big Horn) would have been? 18) If Busby Company acquired a 30% interest in Big Horn Company on December 31, 2020 for $650,000 and the equity method of accounting for the investment were used, the amount of the debit to Equity Investments (Big Horn) would have been? 19) If Busby Company acquired a 20% interest in Big Horn Company on December 31, 2020 for $550,000 and during 2021 Big Horn Company had net income of $320,000 and paid a cash dividend of $85,000, applying the fair value method would give a debit balance in the Equity Investments (Big Horn) account at the end of 2021 of? 20) If Busby Company acquired a 30% interest in Big Horn Company on December 31, 2020 for $650,000 and during 2021 Big Horn Company had net income of $320,000 and paid a cash dividend of $85,000, applying the equity method would give a debit balance in the Equity Investments (Big Horn) account at the end of 2021 of ?
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