Burt Company Purchased Common Stock in RR Company for $500,000

Essay

Burt Company purchased common stock in RR Company for $500,000.In the current year,RR Company reported net income of $48,000 and paid a dividend of $32,000.At the end of the year,the market value of the investment in RR Company was $525,000.
Required:
A)Assume Burt Company owns 10% of the shares of RR Company.Burt Company considers the investment to be available-for-sale securities.Show the effects of the transactions above on the accounts of Burt Company using the balance sheet equation.
B)Assume Burt Company owns 25% of the shares of RR Company.Show the effects of the transactions above on the accounts of Burt Company using the balance sheet equation.