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A corporation uses the equity method to account for its 40% ownership of another company. The investee earned $20,000 and paid $5,000 in dividends. The investor made the following entries:

Investment in affiliate $8,000
Equity in earnings of affiliate $8,000
Cash $2,000
Dividend revenue $2,000

What effect will these entries have on the investor's statement of financial position?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9969790

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