Schlumber Corp. paid $200,000 to purchase 30 percent ofthe stock of Schleep, Inc. this year. At the end of the year,Schleep reported net income of $50,000 and declared and paiddividends of $20,000. If Schlumber uses the equity method toaccount for its investment in Schleep, at what amount wouldthe investment be reported at the end of the year?a. $200,000 c. $215,000b. $209,000 d. $221,000

Question

Schlumber Corp. paid $200,000 to purchase 30 percent of
the stock of Schleep, Inc. this year. At the end of the year,
Schleep reported net income of $50,000 and declared and paid
dividends of $20,000. If Schlumber uses the equity method to
account for its investment in Schleep, at what amount would
the investment be reported at the end of the year?
a. $200,000 c. $215,000
b. $209,000 d. $221,000

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Consolidated Financial Statement

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