Thayer Corporation owns equity-method investments in several companies. Suppose Thayer paid $1,000,000 to acquire a...
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Thayer Corporation owns equity-method investments in several companies. Suppose Thayer paid $1,000,000 to acquire a 35% investment in Brown Software Company. Brown Software reported net income of $620,000 for the first year and declared and paid cash dividends of $420,000. Requirements Record the following in Thayer's journal: (a) purchase of the investment, (b) Thayer's proportion of Brown Software's net income, and (c) receipt of the cash dividends. 1. 2. What is the ending balance in Thayer's investment account? (a) Begin by recording the entry for the purchase of the investment in Brown Software Company. Journal Entry Date Accounts Debit Credit (a) (b) Now record the entry for Thayer's portion of Brown Software's net income. Journal Entry Debit Date Accounts Credit (b) (c) Finally, record the entry for the receipt of cash dividends. Journal Entry Debit Credit Date Accounts (c) Requirement 2. What is the ending balance in Thayer's investment account? The ending balance in Thayer's investment account is $
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