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Suppose that on January 6, 2018, Excel Motors paid $400,000,000 for its 45% investment in Phase Motors. Excel has significant influence over Phase after the purchase. Assume Phase earned net income of $40,000,000 and paid cash dividends of $50,000,000 to all outstanding stockholders during 2018. (Assume all outstanding stock is voting stock.) Read the requirements Requirement 1. What method should Excel Motors use to account for the investment in Phase Motors2 Give your reasoning Excel Motors should use the method to account for its investment in Phase Motors because the investment Requirement 2. Journalize all required 2018 transactions related to Excel Motors's Phase investment include an explanation for each entry. (Record debits first, then Credits. Select the explanation on the last line of the journal entry table. If no entry is required, select "No entry required on the first line of the Accounts and Explanation column and leave the remaining cells blank.) Excel Motors paid $190,000,000 for its 45% investment in Phase Motors Date Accounts and Explanation Debit Credit 2018 Jan 6 Phase paid cash dividends of $50,000,000 to all outstanding sweholders during 2018 Accounts and Explanation 2018 Debit Credit Date Phase earned net income of $40,000,000 during 2018, Accounts and Explanation Date Debit Credit 2018 Requirement 3. Post all 2018 transactions to the investment account What is its balance after all the transactions are posted? How would this balance be classified on the balance sheet dated December 31, 2018? Begin by selecting the investment account and posting the 2018 transactions to the investment T-account Calculate the balance after all the transactions are posted a current asset a current liability a long-term asset a long-term liability How would this balance be classified accumulated other comprehensive income This balance would be classified as on the balance sheet dated December 31, 2018

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