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Charlie Co

question 76

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Charlie Co. owns 30% of the voting common stock of Turf Services Inc. Charlie uses the equity method to account for its investment. On January 1, 2011, the balance in the investment account was $624,000. During 2011, Turf Services reported net income of $120,000 and paid dividends of $30,000.
What is the balance in the investment account as of December 31, 2011?


Definitions:

Trust Fund

A legal entity created to hold assets for the benefit of a particular person, group, or organization, managed by a trustee.

Rate Of Return

A measure of the profit or loss of an investment over a given period, typically expressed as a percentage of the investment's initial cost.

Average Rate Of Return

The mean annual growth rate of an investment over a specified period of time, expressed as a percentage.

Excess Funds

Resources or capital that exceed the immediate operational or investment needs of an entity.

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