(Answered) Question on january 1 2016 abc company purchased 10000

Accounting

Question: On January 1, 2016, ABC Company purchased 10,000 shares of the stock of Ronco, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $80,000, and represents a 30% ownership stake. Ronco made $20,000 of net income in 2014, and paid dividends of $10,000. The price of Ronco's stock increased from $8 per share at the beginning of the year, to $10 per share at the end of the year.

Requirements: Prepare the January 1 and December 31 general journal entries for ABC Company.

How much should the ABC Company report on the balance sheet for the investment in Ronco at the end of 2016?

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