Significant influence impact on investment

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Reference no: EM1348341

On January 4, 2006, Watts Co. purchased 40,000 shares (40%) of the common stock of Adams Corp., paying $800,000. There was no goodwill or other cost allocation associated with the investment. Watts has significant influence over Adams. During 2006, Adams reported income of $200,000 and paid dividends of $80,000. On January 2, 2006, Watts sold 5,000 shares for $125,000. What was the balance in the investment account after the shares had been sold?

Reference no: EM1348341

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