Fizzy Cola acquired 35% of the voting stock of National Bottlers on January 1, 2014 at a cost of $50,000,000, and reports its investment using the equity method. At the date of investment, National’s...

Fizzy Cola acquired 35% of the voting stock of National Bottlers on January 1, 2014 at a cost of $50,000,000, and reports its investment using the equity method. At the date of investment, National’s assets and liabilities were reported at amounts approximating fair value. In 2014, National reported net income of $7,000,000 and declared and paid dividends of $2,000,000. National sells product to Fizzy at a markup of 25% on cost. Fizzy had $6,000,000 of product purchased from National in its ending inventory, measured at cost to Fizzy. What is Fizzy’s Investment in National balance, reported on its December 31, 2014, balance sheet? a. $50,000,000 b. $51,330,000 c. $52,030,000 d. $51,750,000 View Solution:

Fizzy Cola acquired 35 of the voting stock of National