On January 1, 2020, Allan Company bought a 15 percent interest
in Sysinger Company. The acquisition price of $208,500 reflected an
assessment that all of Sysinger’s accounts were fairly valued
within the company’s accounting records. During 2020, Sysinger
reported net income of $112,800 and declared cash dividends of
$33,700. Allan possessed the ability to significantly influence
Sysinger’s operations and, therefore, accounted for this investment
using the equity method.
On January 1, 2021, Allan acquired an additional 80 percent
interest in...