Charlie Co

question 76

Essay

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?

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Definitions:

Lymphatic Tissue

Specialized tissue in the lymphatic system involved in immune responses.

Tongue

A muscular organ in the mouth of most vertebrates, involved in taste, swallowing, and speech.

Hepatic Lobules

The microscopic functional units of the liver, consisting of a hexagonal arrangement of liver cells (hepatocytes) centered around a central vein.

Macrophages

A type of phagocytic cell found in the liver, spleen, lungs, bone marrow, and connective tissue. Macrophages play several roles in humoral and cell-mediated immunity, including presenting the antigens to the lymphocytes involved in these defenses; also known as monocytes while in the bloodstream.