Reference no: EM133177406

Question - Dollarmart Inc. purchased 20,000 of the 60,000 outstanding shares of Valuemart for $7.70 per share on January 1, Year 7. The Dollarmart controller believes that his company has significant interest over Valuemart.

During Year 7, Valuemart earned a net income of $90,000 and paid dividends of $36,000. On December 31, Year 7, Valuemart shares were trading for $8.23.

During Year 8, Valuemart earned a net income of $99,000 and paid dividends of $42,000. On December 31, Year 8, Valuemart shares were trading for $8.88.

Assuming that Dollarmart has significant influence over Valuemart, prepare all the necessary journal entries for Year 7. Only do the Year 7 entries.

Required - Prepare a schedule that shows all changes to the Investment in Valuemart account, and include the Year 8 ending balance of the investment account.