Information: On August 15th, 2021, Sauder purchased 222,140 shares of ZHT, Inc.'s 494,000 outstanding shares for $0.50 per share. On December 31,2021,ZHT, Inc. reported net income of $1,312,000 and paid a dividend of $236,000. ZHT, Inc.'s market price per share on 12/31/2021 was $0.56. No entries have been for this investment. For investment calculations, the finance department has chosen to round any percentages to the nearest two (2) decimal places. Burkett's management would like to know the effect of your adjustment on the following - Current Ratio - ROA Assignment: Calculations 1. Make the appropriate journal entries, if any, to account for the change in value of the new securities (including any necessary changes to income tax expense). Don't forget to use Sauder's chosen rounding convention for investments! 2. Make any necessary changes to the financial statements. Critical Thinking 3. Calculate each of the required ratios using the original values (before any changes) and the updated values (after your changes). 4. Sauder decided to invest in ZHT, Inc. because it controls a significant input in Sauder's production process. However, ZHT, Inc. has struggled in recent years due to a high level of debt for its industry. Given the struggles ZHT, Inc. is having, do you agree with Sauder's decision to invest? How would your decision change if you were one of Sauder's creditors' (i.e. bank and bond holder) vs, one of Sauder's stockholders? 5. Sauder's investment team feels that the stock prices in the portfolio will rise in the coming year (Year 3) because of improvements in the economy. They have recommended that the stocks be transferred to a trading security portfolio so that the company can show these increases in the income statement. Do you think this is a valid argument for reclassifying these securities? Why or why not