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Equity Method for Stock Investment with Loss On January 6, Year 1, Bulldog Co. purchased...

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Equity Method for Stock Investment with Loss On January 6, Year 1, Bulldog Co. purchased 34% of the outstanding stock of Gator Co. for $212,000. Gator Co. paid total dividends of $24,000 to all shareholders on June 30. Gator had a net loss of $56,000 for Year 1. a. Journalize Bulldog's purchase of the stock, receipt of the dividends, and the adjusting entry for the equity loss in Gator Co. stock. Jan. 6- Purchase June 30 - Dividend Dec. 31 - Equity Loss b. Compute the balance of Investment in Gator Co. Stock on December 31, Year 1 c. How does valuing an investment under the equity method differ from valuing an investment at fair value? Under the the investee resulting from earnings and dividend distributions. The investment in the investee. method, the investor will record their proportionate share of the net increase (or decrease) of the book value of -method uses market price information to value the

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