6. In 2019, Parent Company invested $8,500,000 in Subsidiary Company representing a 30% interest in...
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6. In 2019, Parent Company invested $8,500,000 in Subsidiary Company representing a 30% interest in Subsidiary Company's common stock. During the year, Subsidiary Company reports income of $700,000 and pays dividends of $50,000. The market value of Subsidiary Company at year-end is $8,275,000. Parent Company has no other investments in common stock. What effect would these transactions have on Parent Company's account - Investment in Common Stock - Subsidiary Company? (Parent Company use the Equity Method of accounting for this transaction) a) The net balance in the account would decrease by $195,000. b) The balance in the account would increase by $195.000 c) The balance would increase by $210,000. d) The net balance would decrease by $225,000
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