Matching Accounting Methods and Investments}

Consider the following accounting methods for long-term investments.

a. Amortized cost method

b. Fair value method

c. Equity method

d. Consolidation of parent and sub Required:
Match one or more of these methods with each of the investments described below.
1. Mueller Inc. owns \(75 \%\) of Johnston Corporation's outstanding common shares.
2. Anderson Inc. owns \(25 \%\) of Peterson Corporation's outstanding common shares.
3. Wixon Corporation owns \(12 \%\) of the outstanding common shares of Gilman Inc., which were acquired to be sold in the near term.
4. Kohler Corporation holds a \(\$ 40,000\) long-term note receivable from Bennett Inc., a major customer. Kohler expects to sell the note within the next two or three years.
5. Janis Products Inc. holds \(\$ 200,000\) in Gibson Manufacturing bonds. Janis plans to hold these until they mature.
OBJECTIVE (1) Exercise