ABC, Inc. acquired 15% of EFG Corporation on January 1, 2019, for $125,000 when the...
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ABC, Inc. acquired 15% of EFG Corporation on January 1, 2019, for $125,000 when the book value of EFG's net assets was $950,000. During 2019, EFG reported net income of $530,000 and paid dividends of $40,000. On January 1, 2020, ABC purchased an additional 15% of EFG for $550,000. Any excess of cost over book value was attributable to goodwill (No amortization). On that same date, ABC changed to the equity method. During 2020, EFG reported net income of $730,000 and paid dividends of $90,000.
Required:
A. What type and amount of income(s) did ABC record from EFG in 2019?
B. What type and amount of income(s) did ABC record from EFG in 2020?
C. What was the balance in the Equity Investment in EFG account at December 31, 2020?
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