Homework Answers
| Ans.a | |||
| Date | Accounts Titles & Explanations | Debit | Credit |
| 04-Jan | Investment in Silva Company Stock | $ 3,600,000 | |
| Cash (90000*40) | $ 3,600,000 | ||
| 02-Jul | Cash (221000*90000/250000) | $ 79,560 | |
| Investment in Silva Company Stock | $ 79,560 | ||
| 31-Dec | Investment in Silva Company Stock | $ 302,760 | |
| Income of Silva Company (841000*90000/250000) | $ 302,760 | ||
| Ans.b | Amount | ||
| Initial Acquisition cost | $ 3,600,000 | ||
| Add: Equity earnings for year 1 | $ 302,760 | ||
| Less: Cash dividend received | $ -79,560 | ||
| Investment in Silva Company Stock, Dec.31 | $ 3,823,200 | ||
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