On January 4, 2018, Watts Co.purchased 40,000 shares (40%) of the common stock of Adams Corp., paying $800,000.There was no goodwill or other cost allocation associated with the investment.Watts has significant influence over Adams.During 2018, Adams reported income of $200,000 and paid dividends of $80,000.On January 2, 2019, Watts sold 5,000 shares for $125,000.What was the balance in the investment account after the shares had been sold?

Question

Quizplus · Accepted Answer

The Answer of On January 4, 2018, Watts Co.purchased 40,000 shares (40%) of the common stock of Adams Corp., paying $800,000.There was no goodwill or other cost allocation associated with the investment.Watts has significant influence over Adams.During 2018, Adams reported income of $200,000 and paid dividends of $80,000.On January 2, 2019, Watts sold 5,000 shares for $125,000.What was the balance in the investment account after the shares had been sold?