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Q1. Caroline, Inc. acquires 10% of Burch Corporation on January 3, 2019, for $80,000 when the...

Q1. Caroline, Inc. acquires 10% of Burch Corporation on January 3, 2019, for $80,000 when the book value of Burch was $800,000. Caroline adjusted the investment to its fair value of $162,500 at December 31, 2019. During 2019 Burch reported net income of $125,000 and paid dividends of $30,000. On January 2, 2020, Caroline purchased an additional 20% of Burch for $325,000, giving Caroline the ability to significantly influence the operating policies of Burch. Any excess of cost over book value is attributable to goodwill with an indefinite life. What journal entry(ies) is(are) required on January 2, 2020?

During 2020 Burch reported net income of $135,000 and paid dividends of $40,000. What was the balance of investment reported on Dec 31st, 2020?

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