Prime industries acquired a 70 percent interest in suburbia, Ask an Expert

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Prime Industries acquired a 70 percent interest in Suburbia Company by purchasing 14,000 of its 20,000 outstanding shares of common stock at book value of $210,000 on January 1, 2016. Suburbia reported net income in 2016 of $90,000 and in 2017 of $120,000 earned evenly throughout the respective years. Prime received $24,000 dividends from Suburbia in 2016 and $36,000 in 2017. Prime uses the equity method to record its investment.

The balance of Prime’s Investment in Suburbia account at December 31, 2017 is:

$315,000.

$210,000.

$285,000.

$297,000.

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Financial Accounting, Accounting

Category:- Financial Accounting
Reference No.:- M91593796

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