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On 1/1/20X1, Illini Company acquires 40% of Raven's capital stock for $20,000. The investment gives Illini...

  • On 1/1/20X1, Illini Company acquires 40% of Raven's capital stock for $20,000. The investment gives Illini the ability to exercise significant influence over Raven’s operations. Raven's net income for the year 20X1 is $10,000. On 12/31/20X1, the investment has a fair value of $18,000. During 20X1, Raven declares and pays a dividend of $5,000 to all shareholders. On 5/1/20X2, Illini sells the securities for $20,000.

Project 1.3 Part 3 Balance Sheet

Date

Account Name

Debit

Credit

1/1/20X1

Investment-equity method

[A]

Cash

[B]

20X1 dividends:

Cash

[C]

Investment-equity method

[D]

20X1 net income:

Investment-equity method

[E]

Investment revenue

[F]

5/1/20X2

Cash

[G]

Loss

[H]

Investment-equity method

[I]
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