As a long-term investment at the beginning of the year, Acquisitions, Inc., purchased 3 million shares (30%) of Takeover Target’s 10 million shares outstanding for $35 million. During the year, Takeover Target earned net income of $7.3 million and distributed cash dividends of $0.33 per share.
Required:
Record for Acquisitions, Inc., the purchase of the investment and its share of Takeover Target’s net income and dividends using the equity method.