Graphic Company purchased 30 of the voting stock of Plainfie

Graphic Company purchased 30% of the voting stock of Plainfield Company for $30,000 on January 1 of the current year. During the year, Plainfield Company earned $35,000 net income and paid $7,500 in dividends.

At the end of the year, the Investment in Plainfield Company account should have a balance of:

Solution

Calculation of investment account balance at the end of year (Amounts in $)

Therefore, the Investment in Plainfield Company account should have a balance of $38,250 at the end of the year.