Answer:
the balance of Osborn’s Equity Investment (Shea) account be at the end of 2017 is $233,500
Step-by-step explanation:
Given data
Acquistion price = $220000
purchased = 30%
net income = $75,000
cash dividends = $30,000
to find out
the balance of Osborn’s Equity Investment (Shea) account be at the end of 2017
solution
we will find out balance of investment i.e. given by formula
balance of investment = Acquistion price + share of income - share of dividend .................1
so here
share of income = 30% of net income
share of income =30% × 75,000 = $22500 ..............2
and
share of dividend = 30% of cash dividends
share of dividend = 30% × 30000 = $9000 ...............3
put equation 2 and 3 in equation 1 and we get
balance of investment = Acquistion price + share of income - share of dividend
balance of investment = 220000 + 22500 - 9000
balance of investment = $233,500
