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Business, 25.05.2021 19:40 IsabellaGracie

On January 2, 20X1, Pencil Co. purchased 15 percent of Eraser, Inc.’s outstanding common shares for $500,000. Pencil is the largest single shareholder in Eraser and is able to exercise significant influence over Eraser. Eraser reported net income of $400,000 for 20X1 and paid dividends of $100,000. In its December 31, 20X1, balance sheet, what amount should Pencil report as investment in Eraser?

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On January 2, 20X1, Pencil Co. purchased 15 percent of Eraser, Inc.’s outstanding common shares for...

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