Purchaser Corporation acquires 30% of the outstanding voting common shares of the Investee Corporation for $600,000 . Purchaser Corporation acquires the investment in Investee Corporation by buying previously issued shares of Investee Corporation from other investors. Investee Corporation's other comprehensive income during the first period is as follows: Unrealized Holding Gains from Marketable
Securities. . .$ 3,000 Unrealized Losses from Cash Flow Hedges . . . . . . . . . . (2,000) Other Comprehensive Income. . . . . . . . . . . . . . . . . . . . $ 1,000 Purchaser Corporation would make the following entry to recognize its share of the items of other comprehensive income of Investee Corporation:
a. Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Realized Holding Losses from Cash Flow Hedges
(Other Comprehensive Income) . . . . . . . . . . . . . . . . . . . 600
Realized Holding Gains from Marketable Securities
(Other Comprehensive Income) . . . . . . . . . . . . . . . . . . . . . . .900
b. Investment in Stock of Investee Corporation . . . . . . . . . . 300
Realized Holding Losses from Cash Flow Hedges
(Other Comprehensive Income) . . . . . . . . . . . . . . . . . . . 600
Realized Holding Gains from Marketable Securities
(Other Comprehensive Income) . . . . . . . . . . . . . . . . . . . . . . .900
c. Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300
Unrealized Holding Losses from Cash Flow Hedges
(Other Comprehensive Income) . . . . . . . . . . . . . . . . . . . 600
Unrealized Holding Gains from Marketable Securities
(Other Comprehensive Income) . . . . . . . . . . . . . . . . . . . . . . .900
d. Investment in Stock of Investee Corporation . . . . . . . . . . 300
Unrealized Holding Losses from Cash Flow Hedges
(Other Comprehensive Income) . . . . . . . . . . . . . . . . . . . 600
Unrealized Holding Gains from Marketable Securities
(Other Comprehensive Income) . . . . . . . . . . . . . . . . . . . . . . .900
e. none of the above
D
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