On February 1, 2012, Jesse Co Required:
(A)If Jesse Records Its Investment in Avril at Cost

question 47

Essay

On February 1, 2012, Jesse Co. purchased 20% of the outstanding shares of Avril Inc. at a cost of $275,000. During the next two fiscal years, Avril Inc. reported the following:
$\begin{array}{|l|r|r|} \hline & \text { Net income } & \text { Dividends } \\\hline \text { January } 31,2013 & \$ 42,000 & \$ 20,000 \\\hline \text { January } 31,2014 & \$ 35,000 & \$ 15,000\\\hline \end{array}$ Required:
(a)If Jesse records its investment in Avril at cost, what would the balance in the investment account be at January 31, 2014? What would be reported on the statement of comprehensive income with respect to this investment for 2013 and 2014?
(b)If Jesse uses the equity method for reporting its investment in Avril, what would the balance in the investment account be at January 31, 2014? What would be reported on the statement of comprehensive income with respect to this investment?

---

Definitions:

Group Members

Group members refer to individuals who belong to a specific collective or team, each potentially contributing diverse perspectives and skills towards achieving common goals.

Dramatistic Pentad

Kenneth Burke’s core questions of act, scene, agent, agency, and purpose for analysis of motives.

Symbolic Convergence

The condition of group members being in agreement on the organizational symbolism or stories that unite them.

Group Members

Individuals who belong to a specific group or team that shares common goals, tasks, or interests.