On January 1, 2017, Iris, Inc. purchased 35% of Crayola Co.’s outstanding voting stock for $70,000. During 2017, Crayola
Posted: Thu May 19, 2022 11:15 am
On January 1, 2017, Iris, Inc. purchased 35% of Crayola Co.’s
outstanding voting stock for $70,000. During 2017, Crayola earned
net income of $40,000, and paid Iris a cash dividend of $2,500. On
December 31, 2017, Iris’ investment in Crayola had a fair market
value of $65,000. If Iris accounts for this investment using the
equity method, what will the balance in its Investment in Crayola
account be?
outstanding voting stock for $70,000. During 2017, Crayola earned
net income of $40,000, and paid Iris a cash dividend of $2,500. On
December 31, 2017, Iris’ investment in Crayola had a fair market
value of $65,000. If Iris accounts for this investment using the
equity method, what will the balance in its Investment in Crayola
account be?