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Barking Power Company Accounts for Its 35% Investment in Pipeline

question 7

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Barking Power Company accounts for its 35% investment in Pipeline Corporation under the equity method of accounting. The investment was made on January 1, 2014, at a cost of $625,000. Pipeline Corporation reported net income of $85,000 for the year ended December 31, 2014, and paid total dividends of $20,000 during 2014. On December 31, 2014, after making all appropriate entries, the balance in Barking Power Company's Long-Term Investment account will equal:

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Definitions:

Hollow Sphere

A structural formation, often found in biology, where a spherical cavity is surrounded by a wall or membrane.

Cleavage

Cell division without cytoplasmic addition or enlargement; occurs during the first stage of animal development.

Cell Division

A fundamental biological process where a parent cell divides into two or more daughter cells, essential for growth and reproduction.

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The process of creating new blood cells, also known as hematopoiesis, occurring mainly in the bone marrow.

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