Question - On January 1, 2017, XYZ Company purchased 80,000 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 $475,000 and represents a 30% ownership stake. Rayco made $2,748,572 of net income in 2017, and paid dividends of $155,000. The price of Rayco's stock increased for $28 per shares at the beginning of the year, to $40 per share at the end of the year.
a. Prepare the Jan.1 and Dec. 31 general journal entries for XYZ Company
b. How much should the XYZ company report on the balance sheet for the investment in Rayco at the end of 2017.