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On January 1, 2017, Waterway Inc. paid $714,000 for 11,000 shares of Wildhorse Company's voting common stock, which was a 10% interest in Wildhorse. At that date, the net assets of Wildhorse totaled $6,029,000. The fair values of all of Wildhorse's identifiable assets and liabilities were equal to their book values. Waterway does not have the ability to exercise significant influence over the operating and financial policies of Wildhorse. Waterway received dividends of $1.50 per share from Wildhorse on October 1, 2017. Wildhorse reported net income of $559,000 for the year ended December 31, 2017. On July 1, 2018, Waterway paid $2,305,000 for 33,000 additional shares of Wildhorse Company's voting common stock which represents a 30% investment in Wildhorse. The fair values of all of Wildhorse's identifiable assets net of liabilities were equal to their book values of $6,635,000. As a result of this transaction, Waterway has the ability to exercise significant influence over the operating and financial policies of Wildhorse. Waterway received dividends of $2.20 per share from Wildhorse on April 1, 2018, and $2.30 per share on October 1, 2018. Wildhorse reported net income of $657,000 for the year ended December 31, 2018, and $353,000 for the 6 months ended December 31, 2018. (For both purchases, assume any excess of cost over book value is due to goodwill.) (a) Prepare a schedule showing the income or loss before income taxes for the year ended December 31, 2017, that Waterway should report from its investment in Wildhorse in its income statement issued in March 2018. WATERWAY INC. Schedule of Income or Loss from Investment (b) During March 2019, Waterway issues comparative financial statements for 2017 and 2018. Prepare schedules showing the income or loss before income taxes for the years ended December 31, 2017 and 2018, that Waterway should report from its investment in Wildhorse. WATERWAY INC. Schedule of Income or Loss from Investment 2018 2017 Income from Investment in Wildhorse Interest Expense Dividend Revenue Loss from Investments Interest Revenue On January 1, 2017, Waterway Inc. paid $714,000 for 11,000 shares of Wildhorse Company's voting common stock, which was a 10% interest in Wildhorse. At that date, the net assets of Wildhorse totaled $6,029,000. The fair values of all of Wildhorse's identifiable assets and liabilities were equal to their book values. Waterway does not have the ability to exercise significant influence over the operating and financial policies of Wildhorse. Waterway received dividends of $1.50 per share from Wildhorse on October 1, 2017. Wildhorse reported net income of $559,000 for the year ended December 31, 2017. On July 1, 2018, Waterway paid $2,305,000 for 33,000 additional shares of Wildhorse Company's voting common stock which represents a 30% investment in Wildhorse. The fair values of all of Wildhorse's identifiable assets net of liabilities were equal to their book values of $6,635,000. As a result of this transaction, Waterway has the ability to exercise significant influence over the operating and financial policies of Wildhorse. Waterway received dividends of $2.20 per share from Wildhorse on April 1, 2018, and $2.30 per share on October 1, 2018. Wildhorse reported net income of $657,000 for the year ended December 31, 2018, and $353,000 for the 6 months ended December 31, 2018. (For both purchases, assume any excess of cost over book value is due to goodwill.) (a) Prepare a schedule showing the income or loss before income taxes for the year ended December 31, 2017, that Waterway should report from its investment in Wildhorse in its income statement issued in March 2018. WATERWAY INC. Schedule of Income or Loss from Investment (b) During March 2019, Waterway issues comparative financial statements for 2017 and 2018. Prepare schedules showing the income or loss before income taxes for the years ended December 31, 2017 and 2018, that Waterway should report from its investment in Wildhorse. WATERWAY INC. Schedule of Income or Loss from Investment 2018 2017 Income from Investment in Wildhorse Interest Expense Dividend Revenue Loss from Investments Interest Revenue