Compute the balance in the investment account reported Vision on 1/1/09 BEFORE t

Question

Compute the balance in the investment account reported Vision on 1/1/09 BEFORE the sale. (My Question)

Vision Corporation acquired 75 percent of the stock of Meta Company on January 1, 2007, for $225,000. At that date, the fair value of the noncontrolling interest was S75,000 On January 1, 2009, Vision sold 1,500 shares of Meta's $10 par value shares for S60,000 in cash. Meta's balance sheet at the time o in cash. ontained the following amount eta s balance sheefa the time of the salejcontained the following ar e c Cash Accounts Receivable Inventory $50,000 50,000 100,000 Buildings and Equipment (net) 300.000 Retained Earnings 200.000 $40,000 Accounts Payable 40,000 Bonds Payable 20,000 Common Stock Total Assets $400,000 $400,000 During the year of 2009 Meta reported net income of $30,000 and paid dividends of S10.000 Vision used the fully adjusted equity method in accounting for its ownership of Meta Company Ownership Position at Acquisition Ownership Position at Sale Vision-7500-75% NCI- 2500-25% NCI- 4000-4000 Vision-6000-6090 My Own Work 10,000 100% 10.000 100% 2. Compute the balance in the investment account reported by Vision on 1/1/09 before the sale

Explanation / Answer

Net invetsment before the sale shall be (100,000+200,000)*.75= 225,000

The position as on the date of purchase and sale has not changed much

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