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What is balance in eastern corporation investment account

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Question - Eastern Corporation purchased 225,000 Western Corporation common shares on January 2, 2018, for $540,000. Western Corporation has 600,000 shares outstanding. Western Corporation earned net income of $360,000 and paid dividends of $100,000 during 2014.

a) What method should be used to account for the Western Corporation investment?

b) How much revenue will be recorded by Eastern Corporation in 2018 from its investment in Western Corporation?

c) What is the balance in Eastern Corporation's investment account at the end of 2018?

d) Assume all of the above facts except that on January 2, 2018, Eastern Corporation purchased 90,000 shares of Western Corporation. How much revenue will be recorded by Eastern Corporation in 2018 from its investment in Western Corporation?

Reference no: EM132230361

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