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Investor Corporation owns 30% of Investee Corporation. Investee had net earnings of $100,000 during the year...

Investor Corporation owns 30% of Investee Corporation. Investee had net earnings of $100,000 during the year and paid dividends of $30,000. Investor's Investment in Investee account contained a $70,000 balance at the beginning of the year. What would be the correct balance of this account at the end of the year?

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Answer #1

Taking the beginning balance = $70,000

Adding the share of income = $100,000 * 30% = $30,000

= $30,000 * 30% = $9,000

The additional amount = $12,000

The ending balance = $70,000 + $9,000 + $12,000

= $91,000

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