PET Corporation purchased 225,000 shares of SOX Corporation on January 1, 2015, for $540,000. SOX Corporation has 600,000 shares outstanding. SOX Corporation earned net income of $360,000 and paid dividends of $106,000 during 2015.
Required:
a. What method should be used to account for the SOX Corporation investment?
c. What is the balance in PET's investment account at the end of 2015?

Question

PET Corporation purchased 225,000 shares of SOX Corporation on January 1, 2015, for $540,000. SOX Corporation has 600,000 shares outstanding. SOX Corporation earned net income of $360,000 and paid dividends of $106,000 during 2015.
Required:
a. What method should be used to account for the SOX Corporation investment?
  c. What is the balance in PET's investment account at the end of 2015?

Quizplus · Accepted Answer

The Answer of PET Corporation purchased 225,000 shares of SOX Corporation on January 1, 2015, for $540,000. SOX Corporation has 600,000 shares outstanding. SOX Corporation earned net income of $360,000 and paid dividends of $106,000 during 2015.
Required:
a. What method should be used to account for the SOX Corporation investment?
  c. What is the balance in PET's investment account at the end of 2015?

PET Corporation Purchased 225,000 Shares of SOX Corporation on January