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On January 1, 2010, Jumper Co. acquired all of the common stock of Cable Corp. for $540,000. Annual amortization associated with the purchase amounted to $1,800. During 2010, Cable earned net income of $54,000 and paid dividends of $24,000. Cable's net income and dividends for 2011 were $86,000 and $24,000, respectively.
Required:
Assuming that Jumper decided to use the partial equity method, prepare a schedule to show the balance in the investment account at the end of 2011.
Flexible Budget
A budget that adjusts or varies with changes in volume or activity, allowing for more accurate budgeting in variable operating environments.
Machine-Hours
A measure of production time, where one machine-hour equals the operation of one machine for one hour.
Static Planning Budget
A budget based on a single level of activity, not adjusting for actual levels of activity experienced.
Planning Budget
A financial plan for a specific time period, outlining expected revenue, expenses, and resource allocations to achieve business goals.
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