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Module V· Consolidation Methods & Equity MethodIntermediate
Question

IndustrialCo acquires 25% of SoftwareCo for $65m cash. How does IndustrialCo's balance sheet change immediately after closing? Cash was $300m, other assets $500m, equity $400m, debt $400m.

Answer

Cash -65, equity-method investment +65, total assets unchanged, no immediate P&L or equity impact.

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