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How does transaction affect investment in ricardo account

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Reference no: EM13139444

DeMilo, Inc., owns 100 percent of the 40,000 outstanding shares of Ricardo, Inc. DeMilo currently carries the Investment in Ricardo account at $490,000 using the equity method.

Ricardo issues 10,000 new shares to the public for $15.75 per share.

How does this transaction affect the Investment in Ricardo account that appears on DeMilo’s financial records?

Investment in Ricardo should be increased by$?

Reference no: EM13139444

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