1) a) Assume that, on January 1, 2021, Shlap Enterprises paid $4,000,000 for its investment in 60,000 shares of Dodger Co. Further, assume that Dodger has 150,000 total shares of stock issued and estimates a ten-year remaining useful life and straight-line depreciation with no residual value for its depreciable assets. At January 1, 2021, the book value of Dodger' identifiable net assets was $8,000,000, and the fair value of Dodger was $12,000,000. The difference between Dodger' fair value and the book value of its identifiable net assets is attributable to $1,500,000 of land and the remainder to depreciable assets. Goodwill was not part of this transaction. The following information pertains to Dodger during 2021: Net income $ 800,000 Dividends declared and paid $ 600,000 Market price of common stock on 12/31/2021 $ 85 / share What amount would Shlap Enterprises report in its year-end 2021 balance sheet for its investment in Dodger Co.? Multiple Choice $4,320,000. $3,980,000. $4,000,000. $4,080,000.

b)

On January 2, 2021, Garner, Inc. bought 10% of the outstanding common stock of Moody, Inc. for $60 million cash. Garner does not exercise significant influence over Moody. At the date of acquisition of the stock, Moodys net assets had a book value and fair value of $180 million. Moodys net income for the year ended December 31, 2021, was $30 million. During 2021, Moody declared and paid cash dividends of $6 million. On December 31, 2021, the fair value of 100% of Moodys stock was $650 million. On December 31, 2021, Garners investment should be reported at:

Multiple Choice

• $68.0 million.

• $60.0 million.

• $65.0 million.

• $62.4 million.