Instrument Corporation has the following investment which was held throughout 2021–2022. Assume the organization has invested in stock and holds 40%.                                                                                      Fair Value                                       Cost                                      12/31/21         Equity investment       $900,000                                 $1,200,000      A. Record the initial investment. B. Total dividends paid equal $400,000. Record the dividends. C. Total Net Income for the year equals $600,000. Record the income. D. If Instrument increased its investment to 55%, what would occur? Explain your answer.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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  1. Instrument Corporation has the following investment which was held throughout 2021–2022. Assume the organization has invested in stock and holds 40%.

                                                                                     Fair Value

                                      Cost                                      12/31/21        

Equity investment       $900,000                                 $1,200,000     

A. Record the initial investment.

B. Total dividends paid equal $400,000. Record the dividends.

C. Total Net Income for the year equals $600,000. Record the income.

D. If Instrument increased its investment to 55%, what would occur? Explain your answer.

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