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Dotes, Inc. owns 40% of Abner Co. Dotes accounts for its investment using the equity method. Abner follows a policy of paying dividends equal to 30% of its income each year. During the current year, Abner reported net income of $216,000. Dotes has an effective income tax rate of 32%.
Required:
What journal entry would Dotes record at the end of the current year for income taxes relating to the investment in Abner? Assume the investment is to be held for an indefinite time and that all amounts are to be rounded to the nearest dollar.
Musical Ability
Refers to the natural talent or acquired skill in understanding, producing, or interpreting music.
Essential Oils
Concentrated plant extracts that retain the natural smell and flavor, or "essence," of their source.
Aromatherapy
The therapeutic use of essential oils of plants in which the odor or fragrance plays an important part.
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