4.

Assume that, on January 1, 2016, Matsui Co. paid $2,244,000 for its investment in 74,800 shares of Yankee Inc. Further, assume that Yankee has 340,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $680,000 at January 1, 2016. The following information pertains to Yankee during 2016:

Net income	$340,000
Dividends declared and paid	$102,000
Market price of common stock on 12/31/2016	$32/share

What amount would Matsui report in its year-end 2016 balance sheet for its investment in Yankee?

a) $2,686,000

b) $2,346,000

c) $2,296,360

d) None of these answer choices is correct.

7. Wang Corporation purchased $230,000 of Hales Inc. 6% bonds at par with the intent and ability to hold the bonds until they matured in 2020, so Wang classifies its investment as held to maturity. Unfortunately, a combination of problems at Hales and in the debt market caused the fair value of the Hales investment to decline to $187,000 during 2016. Wang views this decline as an other-than-temporary (OTT) impairment. Wang calculates that, of the $43,000 drop in fair value, $16,000 of it relates to credit losses and $27,000 relates to non-credit losses. If Wang accounts for the Hales bonds under IAS No. 39, before-tax net income for 2016 will be reduced by:

a) $43,000

b) $0

c) $16,000

d) $27,000

9. On January 2, 2015, Howdy Doody Corporation purchased 15% of Ranger Corporation's common stock for $58,000 and classified the investment as available for sale. Ranger's net income for the years ended December 31, 2015 and 2016, were $19,000 and $55,000, respectively. During 2016, Ranger declared and paid a dividend of $67,500. There were no dividends in 2015. On December 31, 2015, the fair value of the Ranger stock owned by Howdy Doody had increased to $70,000. How much should Howdy Doody show in the 2016 income statement as income from this investment?

a) $22,125

b) $10,125

c) $18,000

d) $12,000