The summarized balance sheets of Thunder Bay Corp. and Fort William Corp. at December 31,...
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Accounting
The summarized balance sheets of Thunder Bay Corp. and Fort William Corp. at December 31, 2020, are as follows:
THUNDER BAY CORP.Balance SheetDecember 31, 2020
Assets
$400,000
Liabilities
$50,000
Common shares
200,000
Retained earnings
150,000
Total equities
$400,000
FORT WILLIAM CORP.Balance SheetDecember 31, 2020
Assets
$300,000
Liabilities
$75,000
Common shares
185,000
Retained earnings
40,000
Total equities
$300,000
If Thunder Bay acquired a 20% interest in Fort William on December 31, 2020, for $65,000 and the equity method of accounting for the investment were used, the amount of the debit to Investment in Fort William Corp. would have been
$60,000.
$65,000.
$45,000.
$37,000.
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