The balance in an investment account after shares are sold is $845,250.
<h3>What is an investment?</h3>
An investment is the acquisition of shares owned by a parent company in a subsidiary company.
Given values for step 1:
Cost of shares : $900,000
Share in profit of Company W: $ 96,000 ($240,000 X 40%)
Share in dividends of Company W: $ 30,000 ($75,000 X 40%)
<u>Step-1</u> Computation of investment value of Company S :
Given values for step 2:
Number of shares sold: 5,000
Number of shares owned : 40,000
investment value (refer Step-1): $966,000
<u>Step-2</u> Computation of investment value after the sale of shares :
Given values for step 3:
Investment value of Company S:$966,000
Investment value after shares sale:$120,750
<u>Step-3 </u>Computation of balance in investment value:
Therefore, after selling the shares, the amount of investment comes out to be $845,250.
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