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Hi! Could you possibly help me figure out this template? CHAPTER 17: INVESTMENTS (12 POINTS) Background As discussed in Chapter 17, companies invest additional cash
Hi! Could you possibly help me figure out this template?
CHAPTER 17: INVESTMENTS (12 POINTS) Background As discussed in Chapter 17, companies invest additional cash flow in various types of investments. The motivation behind each venture varies, as does the financial reporting requirements. As you prepare the financial statements below, consider the relevance of each investment's fair market value. Required Kelvie Inc. is a manufacturing company and held the following investments during 2012. Show how each investment would impact/change Kelvie's 2012 year-end financial statements using the template provided on Blackboard. Indicate the type of activity for each line reported on the Statement of Cash Flows. 1. Kelvie Inc. purchased Mao & Co.'s 5-year, 5%, $100,000 bond. The bond was purchased on January 1, 2012 for $95,788 to yield 6% interest. The bond pays annual interest on December 31. Kelvie intends to hold the bond to maturity. At December 31, 2012, the bond had a fair market value of $96,500. 2. Kelvie Inc. purchased 6,000 shares of Dalton Ltd. common stock at a cost of $255,000 on July 31, 2012. These shares do not give Kelvie significant influence over Dalton. On October 31, 2012, Dalton Ltd. paid a $2 per share cash dividend. At December 31, 2012, Dalton Ltd. was trading at $40 a share. 3. On January 1, 2012, Kelvie Inc. invested in ASP Industries by acquiring 30% of ASP's outstanding stock for $21,500,000. During 2012, ASP Industries reported net income of $5,000,000 and paid cash dividends totaling $1,000,000. At December 31, 2012, ASP Industries had a market value of $75,000,000. Note: Ignore any excess price issues. ACCT 321 CHAPTER 17 HANDOUT | PAGE 1 Name: KUID: Section Time: ACCT 321: CHAPTER 17 HANDOUT TEMPLATE Statement of Cash Flows Purchase of Investment (I) Mao & Co. Bonds Dalton Ltd. Stock ASP Industries Income Statement Balance Sheet Assets: ` Liabilities: Equity: ACCT 321 CHAPTER 17 HANDOUT | PAGE 1Step by Step Solution
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