Question
Using the Equity Method of Accounting On 1/1/xx, Company A purchases 100% of Company B for $100,000 cash. On 12/31/xx, Company B realizes profit of
Using the Equity Method of Accounting
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:
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.
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Accounting The Basis For Business Decisions
Authors: Robert F. Meigs, Jan R. Williams, Susan F Haka, Mark S. Bettner
International 11th Edition
007115809X, 978-0071158091
