Question

On January 1, 2021, Fargo corporation purchase a significant influence shares investment in Concord corporation for $250,000. This investment balance represents 30% of the equity of the Concorde corporation. During 2021, Concord corporation reported net income of $60,000 on November 15, 2021 Concord corporation paid cash dividends of 25,000 to its shareholders. Using this information what is the 2021 year and balance in Fargo corporations investment in Concord corporation account

Answer 1

The  year-end balance in Fargo Corporations in 2021 Investment will be, 258000.

Amount paid for investment= 250000

Add: Share of net income  = 60000*30%

=  18000

Less: Dividends received = 25000*40%

= 10000

What is year-end balance?

Year-end adjustments are changes that need to be made to the balance sheet and profit and loss statement in order to ensure that the year-end reports are an accurate reflection of the company's accounts.

The year-end closing process identifies any balances or deficits on the company's books, which are then carried over into the new fiscal year.

Thus, 2021 year-end balance in Fargo Corporations Investment will be, 258000.

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