Accounting Question? (9) Multiple Choice check?

Parris Corporation purchased 40% of Samitz Corporation for $100,000 on January 1. On November 17 of the same year, Samitz Corporation declared total cash dividends of $12,000. At year-end, Samitz Corp reported net income of $60,000. The balance in the Parris Corp's Long-Term investment in Samitz Corp at December 31 should be:

$80,800
$100,000
$95,200
$119,200
$124,000

show work please...

my answer: 100,000-(12,000*40%)+(60,000*40%)= 119,200

I assume this is a long term investment under the Equity Method.

Entry on the purchase would be:
Jan. 1
dr investment in Samitz Corp. stock 100,000.
cr cash 100,000.

Dec. 31
dr investment in Samitz Corp. stock 24,000.
cr income of Samitz Corp.24,000.

AND:
Dec. 31
dr cash 4,800.
cr investment in Samitz Corp. stock 4,800.

This gives you a dr of 100,000. + 24,000. =124,000.
124,000.- the cr of 4,800. = 119,200.

119,200. (answer) you were correct!

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