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nzelmo Corporation invested in Jones Manufacturing by purchasing a? 10% interest in the company. Anzelmo had...

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Accounting

nzelmo Corporation invested in Jones Manufacturing by purchasinga? 10% interest in the company. Anzelmo had no significantinfluence in Jones. Over? time, Anzelmo acquired more shares in?Jones, and in? 2016, Anzelmo's president became a member of theboard of directors when its ownership interest reached? 30% ofJones. The cost basis of its investment is? $2,000,000. Under theequity? method, the valuation of the investment would be?$2,400,000. The fair value of the investment is? $2,600,000. Whatis the amount of the adjustment to the investment account necessaryto properly record the change in accounting? principal?

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Cost method of investment should be used if the investors do not have more than 20 to 50 investment and do not have sufficient influence over the company Under this method dividend received should    See Answer
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nzelmo Corporation invested in Jones Manufacturing by purchasinga? 10% interest in the company. Anzelmo had no significantinfluence in Jones. Over? time, Anzelmo acquired more shares in?Jones, and in? 2016, Anzelmo's president became a member of theboard of directors when its ownership interest reached? 30% ofJones. The cost basis of its investment is? $2,000,000. Under theequity? method, the valuation of the investment would be?$2,400,000. The fair value of the investment is? $2,600,000. Whatis the amount of the adjustment to the investment account necessaryto properly record the change in accounting? principal?

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