On January 1, 2017, the Leaf Company acquired a 5% interest in the Trunk Corporation through the purchase of 100,000 shares of Trunk's common stock for $640,000; the investment is recorded on Leaf's books as trading securities. During 2017, Trunk paid $40,000 in dividends and reported net income of $100,000. The market price of Trunk's common stock was $6.20 per share on December 31, 2017. Leaf
should report the investment in the Trunk Corporation on its December 31, 2017, balance sheet at
A) $620,000.
B) $627,000.
C) $640,000.
D) $645,000.
A
You might also like to view...
Lassen Corporation issued ten-year term bonds on January 1, 2010, with a face value of $800,000 . The face interest rate is 6 percent and interest is payable semi-annually on June 30 and December 31 . The bonds were issued for $690,960 to yield an effective annual rate of 8 percent. The effective interest method of amortization is to be used. The entry to record the bond interest expense on the
first interest payment date is: (Round answer to the nearest dollar.) a. Bond Interest Expense 24,000 Cash 24,000 b. Bond Interest Expense 27,638 Unamortized Bond Discount 3,638 Cash 24,000 c. Bond Interest Expense 27,638 Cash 27,638 d. Bond Interest Expense 27,638 Unamortized Bond Discount 27,638
Respond to the following: a. How is net income different from earnings in SFAC No. 5? b. What is comprehensive income?
What will be an ideal response?
Which of the following is not a procedure that is designed to provide evidence about the existence of loss contingencies?
A. Reviewing the minutes of board of directors' meetings. B. Obtaining a lawyers' letter. C. Confirming accounts payable. D. Review correspondence with banks.
While incorporating a central selling feature in an application message, two to four paragraphs are normally insufficient for supporting evidence
Indicate whether the statement is true or false