1.

On November 1, 2021, Pharoah Company purchased Wildhorse, Inc., 10-year, 10%, bonds with a face value of $ 840000, for $ 760000. An additional $ 28000 was paid for the accrued interest. Interest is payable semiannually on January 1 and July 1. The bonds mature on July 1, 2028. Pharoah uses the straight-line method of amortization. Ignoring income taxes, the amount reported in Pharoah's 2021 income statement as a result of Pharoah's available-for-sale investment in Wildhorse was

$ 16000.

$ 14000.

$ 15300.

$ 12700.

2.

Crane Company purchased $ 1190000 of 8%, 5-year bonds from Carlin, Inc. on January 1, 2021, with interest payable on July 1 and January 1. The bonds sold for $ 1239996 at an effective interest rate of 7%. Using the effective interest method, Crane Company decreased the Available-for-Sale Debt Securities account for the Carlin, Inc. bonds on July 1, 2021 and December 31, 2021 by the amortized premiums of $ 4148 and $ 4292, respectively. At February 1, 2022, Crane Company sold the Carlin bonds for $ 1225900. After accruing for interest, the carrying value of the Carlin bonds on February 1, 2022 was $ 1230500. Assuming Crane Company has a portfolio of available-for-sale debt investments, what should Crane Company report as a gain (or loss) on the bonds?

$ -4600.

$0.

$ -14096.

$ -9496.

3.

On its December 31, 2020, balance sheet, Sunland Company reported its investment in equity securities, which had cost $540000, at fair value of $512000. At December 31, 2021, the fair value of the securities was $531000. What should Sunland report on its 2021 income statement as a result of the increase in fair value of the investments in 2021?

Unrealized gain of $19000.

Realized gain of $19000.

Unrealized loss of $9000.

$0.

4.

Oriole Company owns 14000 of the 50000 outstanding shares of Taylor, Inc. common stock. During 2021, Taylor earns $ 1020000 and pays cash dividends of $ 825000. Oriole should report investment revenue for 2021 of

$ 0.

$ 54600.

$ 285600.

$ 231000.