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Record the activity on the books of Relish

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Question - Relish Company purchased 15% of Squall Company on January 1, 2021 for $300,000. At the time, there was no significant influence and the securities were short term investments. Squall had earnings in 2021 of $250,000 and paid dividends of $60,000. At December 31, 2021 the value of Relish's interest in Squall had fallen to $275,000.

Required -

a) Using the market value method, record the activity for 2021 on the books of Relish.

b) Assuming the $300,000 purchase above represented 30% interest in Squall, use the equity method to record the activity for 2021 on the books of Relish.

Reference no: EM132861749

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