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Sagot :
Answer:
$750,000
Explanation:
Computation of the balance of the Equity Investment account on the parent's pre-consolidation balance sheet
EQUITY INVESTMENT ACCOUNT
Purchase price $400,000
Add Net income $400,000
Less Dividends ( $50,000 )
Balance of equity $750,000
($400,000+$400,000-$50,000)
Therefore the balance of the Equity Investment account on the parent's pre-consolidation balance sheet assuming that the Goodwill asset has not declined in value subsequent to the date of acquisition will be $750,000
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