Question

Zach Company owns 45% of the voting stock of Tomas Corporation and uses the equity method in recording this investment. Tomas Corporation reported a $20,000 net loss. Zach Company's entry would include a _________.a. debit to the investment account for $9,000
b. credit to cash for $9,000

c. credit to a loss account for $9,000

d. credit to the investment account for $9,000

Answer 1

Answer:

d. Credit to the investment account for $9000.

Explanation:

Since Zach company owns 45% of the voting stock in the Tomas corporation and Tomas corporation uses an equity method in recording this investment and it reports a net loss of $20,000.

The Zach company's entry would be Credit to the investment account for $9000.

- Calculations: $20000 * 0.45 = 9000.

Hope this helps.

ThankYou.

Answer 2

Answer:

The correct answer is option D. credit to the investment account for $9,000

Explanation:

0.45 x $20,000 = $9,000

Hence the answer is D. credit to the investment account for $9,000