On January 1, X Corporation purchased 80% of Y Corporation for $250,000. On May 20, Y Corporation declared total dividends of $30,000. At year-end Y Corporationreported profit of $150,000. The balance in X Corporation's Investment in Y Corporation account at December 31 should be:

Question

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The initial investment is $250,000. X Corporation's share of Y's profit is 80% of $150,000, which is $120,000. X Corporation's share of the dividends is 80% of $30,000, which is $24,000. The balance is $250,000 + $120,000 - $24,000 = $346,000.

On January 1, X Corporation Purchased 80% of Y Corporation