Problemon january 2 20x5 well co purchased 10 percent of, Ask an Expert

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On January 2, 20X5, Well Co. purchased 10 percent of Rea, Inc.'s outstanding common shares for $400,000. Well is the largest single shareholder in Rea, and Well's officers are a majority on Rea's board of directors. As a result, Well is able to exercise significant influence over Rea. Rea reported net income of $500,000 for 20X5 paid dividends of $150,000. In its December 31, 20X5, balance sheet, what amount should Well report as in Rea?

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