Boston Exporters purchased 40,000 of the 100,000 outstanding shares of Giant Distributors for $2,000,000. Boston has significant influence over Giant and will account for this investment using the equity method. During the year, Giant declared dividends of $140,000 and reported Net Income of $800,000. Record all necessary journal entries for Boston related to this investment for the year. Then, calculate the ending balance of the Investment in Giant account.

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The Answer of Boston Exporters purchased 40,000 of the 100,000 outstanding shares of Giant Distributors for $2,000,000. Boston has significant influence over Giant and will account for this investment using the equity method. During the year, Giant declared dividends of $140,000 and reported Net Income of $800,000. Record all necessary journal entries for Boston related to this investment for the year. Then, calculate the ending balance of the Investment in Giant account.

Boston Exporters Purchased 40,000 of the 100,000 Outstanding Shares of Giant