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What amount should Owl report as investment in Fox

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Question - On January 2, 2019, Owl Co. purchased a 25% interest in Fox Co. for $650,000. On this date, Fox's stockholders' equity was $2,000,000. The carrying amounts of Fox's identifiable net assets approximated their fair values, except for land whose fair value exceeded its carrying amount by $500,000. For 2019, Fox reported net income of $300,000 and declared dividends of $40,000. Owl accounts for this investment using the equity method. In its December 31, 2019 balance sheet, what amount should Owl report as investment in Fox?

A) $650,000

B) $725,000

C) $910,000

D) $715,000

Reference no: EM132554163

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