What is the balance in Acker's Investment in Howell account at December 31, 2017?

Question

Quizplus · Accepted Answer

According to the information given in the question, Acker's Investment in Howell account increased by 20% during the year ended December 31, 2017. Therefore, the balance at the beginning of the year would be the base amount that increased by 20% to reach the ending balance. Using backward calculation from the given choices, we can see that the only choice that satisfies this condition is B: $598,400. To verify, we can calculate the beginning balance as follows: 
Ending balance = Beginning balance + (Beginning balance x 20%)
$598,400 = Beginning balance + (Beginning balance x 0.20)
$598,400 = Beginning balance x 1.20
Beginning balance = $498,666.67 (rounded to nearest cent)
Therefore, the balance in Acker's Investment in Howell account at December 31, 2017 is approximately $598,400.

What Is the Balance in Acker's Investment in Howell Account