Question
On 1/1/16, Integrity Corporations net worth was as follows: Common stock (15,000 shares, $10 par value) $ 150,000 Additional paid-in-capital 30,000 Retained earnings 60,000 Total
On 1/1/16, Integrity Corporations net worth was as follows:
Common stock (15,000 shares, $10 par value) | $ 150,000 |
Additional paid-in-capital | 30,000 |
Retained earnings | 60,000 |
Total | $240,000 |
On 1/1/16, Honesty, Inc. purchased 2,500 shares of Integrity Corporation at a price of $29 per share. Integrity Corporations equity securities are not readily marketable. Honesty could not attribute any of the excess cost over book value to any specific Integrity assets and considered this excess to be goodwill.
Integritys earnings and dividends for the next three years were as follows:
Year
| Net Income
| Dividends |
2016 | 10,000 | 6,000 |
2017 | 25,000 | 30,000 |
2018 | 80,000 | 40,000 |
Required:
Complete the following table, assuming that Honesty, Inc. had significant influence over Integrity Corporation:
For Honesty, Inc.s financial statements:
Year
|
Balance sheet amount reported for Investment in Integrity Corporation at end of 12/31 | Income statement amount reported for Investment Income from Integrity Corporation for the fiscal year ended 12/31 |
2016
|
|
|
2017
|
|
|
2018
|
|
|
Attach an excel spreadsheet containing documentation to support the above reported amounts.
Complete the following table, assuming that Honesty, Inc. did not have significant influence over Integrity Corporation:
For Honesty, Inc.s financial statements:
Year
|
Balance sheet amount reported for Investment in Integrity Corporation at end of 12/31 | Income statement amount reported for Investment Income from Integrity Corporation for the fiscal year ended 12/31 |
2016
|
|
|
2017
|
|
|
2018
|
|
|
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