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Fill in the blank: Jackson Company acquires 75% of Browne Company for $600,000 on January 1,...

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Jackson Company acquires 75% of Browne Company for $600,000 on January 1, 2019. Browne reported common stock of $350,000 and retained earnings of $250,000 on that date. Equipment was undervalued by $20,000 and buildings were undervalued by $60,000, each having a 10-year remaining life. Any excess consideration transferred over fair value was attributed to goodwill with an indefinite life. Based on an annual review, goodwill has not been impaired.  Browne had net income of $200,000 and paid dividends of $50,000 in 2019. Jackson accounts for its investment in Browne using the equity method. Jackson's Investment in Browne's account balance at December 31, 2019 is

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Answer #1

In the books of Jackson Company

Investment in Browne ($)

In the books of Jackson Company Investment in Browne ($) 31/12/19 By 1/1/19 To Cash 1600,000 Cash 37,500 (50,000*75%) 31/12/1

So balance is $ 712,500.

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