Dubois Corporation purchases an investment in Teton, Inc. at a purchase price of $9.0 million cash, representing 40% of the book value of Teton. During the year, Teton reports net income of $708,000 and pays $138,000 of cash dividends. At the end of the year, the market value of Dubois' investment is $9.72 million.
a. What is the year-end balance of the equity investment in Teton, Inc.?
b. What amount of equity earnings would be reported by Dubois Corporation?
c. What is the amount of the unrealized gain or loss at the end of the year? How does Dubois Corporation account for this unrealized gain or loss?

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The Answer of Dubois Corporation purchases an investment in Teton, Inc. at a purchase price of $9.0 million cash, representing 40% of the book value of Teton. During the year, Teton reports net income of $708,000 and pays $138,000 of cash dividends. At the end of the year, the market value of Dubois' investment is $9.72 million.
a. What is the year-end balance of the equity investment in Teton, Inc.?
b. What amount of equity earnings would be reported by Dubois Corporation?
c. What is the amount of the unrealized gain or loss at the end of the year? How does Dubois Corporation account for this unrealized gain or loss?

Dubois Corporation Purchases an Investment in Teton, Inc