On January 1, 2017, Valentine Corporation purchased 25% of the common stock outstanding of Betz Corporation for $200,000. During 2017, Betz Corporation reported net income of $80,000 and paid cash dividends of $48,000. The balance of the Stock Investments-Betz account on the books of Valentine Corporation at December 31, 2017, is

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The initial investment by Valentine Corporation in Betz Corporation was $200,000 for 25% of the common stock outstanding. 
During 2017, Betz Corporation reported net income of $80,000. Since Valentine Corporation owns 25% of Betz Corporation, it will recognize $20,000 ($80,000 x 25%) in income from its investment. 
Also, Betz Corporation paid cash dividends of $48,000. Therefore, Valentine Corporation will receive $12,000 in dividends ($48,000 x 25%). 
The balance of the Stock Investments-Betz account on the books of Valentine Corporation at December 31, 2017, would be the initial investment of $200,000 + $20,000 in income - $12,000 in dividends, which equals $208,000.

On January 1, 2017, Valentine Corporation Purchased 25% of the Common