On January 1,X Corporation purchased 80% of Y Corporation for $250,000.On May 20,Y Corporation declared total dividends of $30,000.At year-end Y Corporation reported net income of $150,000.The balance in X Corporation's Investment in Y Corporation account at December 31 should be:

Question

Quizplus · Accepted Answer

The initial investment cost $250,000 for 80% ownership. 
This means that X Corporation's share of Y Corporation's dividends is 80% of $30,000, or $24,000. 
The share of net income is also 80%, or $120,000. 
Therefore, the balance in X Corporation's Investment in Y Corporation account at December 31 is:
Initial investment + Share of net income - Share of dividends
$250,000 + $120,000 - $24,000 = $346,000.

On January 1,X Corporation Purchased 80% of Y Corporation for $250,000.On