Calculate the balance of the investment account

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Question: On January 1st 2019, Nizwa Corp purchased a 100% interest in Al Izz Corp for $500,000. On the date of acquisition, book value of Al Izz consists of the following; Common Stock $100,000, Additional Paid-in Capital $70,000, and Retained Earnings of $200,000. On that date, Al Izz Corp had a patent that was undervalued by $150,000 on its books with a remaining useful life of 20 years. Nizwa Corp maintains the investment account in Al Izz Corp using the equity method.

During 2019, Al Izz Corp earned income of $100,000 and declared and paid dividends of $30,000.

Required: Calculate the balance of the investment account by the end of 2019.

Reference no: EM132742097

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