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JLB Enterprises acquired 15% of REB Corporation on January 1, 2020, for $63,000 when the...

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Accounting

JLB Enterprises acquired 15% of REB Corporation on January 1, 2020, for $63,000 when the book value of REBs net assets was $360,000. During 2020, REB reported net income of $90,000 and paid dividends of $30,000. On January 1, 2021, JLB purchased an additional 25% of REB for $240,000. Any excess of cost over book value was attributable to goodwill (No amortization). On that same date, JLB changed to the equity method. During 2021, REB reported net income of $120,000 and paid dividends of $45,000.

a. What investment income did JLB record from REB in 2020?

b. What investment income did JLB record from REB in 2021?

c. What journal entry was made on Jan 1 2021 as switch equity method?

d. What was the balance in Equity Investment at December 31, 2021? (Hint: use the amount paid for 25% of REB from JLB to calculate the implied fair value of the original 15% of the investment)

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