Question - On January 1, 2014, XYZ Company purchased 10,000 shares of the stock of Rayco, and did obtain significant influence. The investment is intended as a long-term investment. The stock was purchased for $96,000, and represents a 32% ownership stake. In 2014, Rayco made net income of $30,000 and paid dividends of $12,000. The price of Rayco's stock increased from $11.50 per share at the beginning of the year to $12.50 per share at the end of the year.
a. Prepare the January 1 and December 31 general journals entries for XYZ Company. (please show all calculations).
b. How much should the XYZ Company report of the balance sheet for the investment in Rayco as the end of 2014. (Please show calculation).