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On January 1, 2018, ABC Company acquired all of the common stock of XYZ Corporation...

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Accounting

On January 1, 2018, ABC Company acquired all of the common stock of XYZ Corporation for its underlying book value of $500,000. ABC accounts for its investment in XYZ using the equity method. Information about the two companies as of the date of combination and for the years 2018 and 2019 is as follows. The balance in the account Investment in XYZ Stock on ABCs books at the end of 2019 would be:

$575,000

$725,000

$500,000

$675,000

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