Homework Answers
| Date | Account name | Dr. | Cr. | |
| a | Jan 1, 2020. | Investment in Auto supplies common stock | $ 36,000 | |
| Cash | $ 36,000 | |||
| b | Dec 31, 2020. | Investment in Auto supplies common stock | $ 4,320 | |
| Equity in auto supplies earnings | $ 4,320 | |||
| To record proportionate share of net income | ||||
| Dec 31, 2020. | Equity in auto supplies earnings | $ 144 | ||
| Investment in Auto supplies common stock | $ 144 | |||
| To adjust for depreciation | ||||
| c | Feb 2021. | Cash | $ 720 | |
| Investment in Auto supplies common stock | $ 720 |
Shareholding percentage = 360/900 = 40%
Share in net income = $10,800 X 40% = $4,320
Depreciation share = ($27,000 - $23,400)/ 10 years X 40% = $144
Dividends = 360 shares X $2 per share = $720
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