On 1-1-16, Alpha Company purchased 2500 of the 10,000 shares ofBravo Company for $50,000. You use…

On 1-1-16, Alpha Company purchased 2500 of the 10,000 shares ofBravo Company for $50,000. You use equity method. Purchase pricewas equal to 25% of Bravo Company’s equity. Bravo Company’s netincome was $100,000 for year 2016 and $200,000 for year 2017.Dividends paid by Bravo were $1 per share in 2016 and $1.50 pershare in 2017. Make all required entries on Alpha Company’sbooks.

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