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On January 1, 2020, Swifty Inc. paid $694,000 for 9,000 shares of Nash Company's voting common stock, which was a 10% interest in Nash. Swifty
On January 1, 2020, Swifty Inc. paid $694,000 for 9,000 shares of Nash Company's voting common stock, which was a 10% interest in Nash. Swifty does not have the ability to exercise significant influence over the operating and financial policies of Nash. Swifty received dividends of $1.60 per share from Nash on October 1, 2020. Nash reported net income of $561,000 for the year ended December 31, 2020. The cost and fair value of Genso common stock was the same at December 31, 2020. On July 1, 2021, Swifty paid $2,297,000 for 27,000 additional shares of Nash Company's voting common stock, which represents an additional 30% investment in Nash. As a result of this transaction, Swifty has the ability to exercise significant influence over the operating and financial policies of Nash. Swifty received dividends of $2.00 per share from Nash on April 1, 2021, and $2.60 per share on October 1, 2021. Nash reported net income of $656,000 for the year ended December 31, 2021, and $351,000 for the 6 months ended December 31, 2021. (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, 2020, that Swifty should report from its investment in Nash in its income statement issued in March 2021. SWIFTY INC. Schedule of Income or Loss from Investment For the Year Ended December 31, 2020 (b) During March 2022, Swifty issues comparative financial statements for 2020 and 2021. Prepare schedules showing the income or loss before income taxes for the years ended December 31, 2020 and 2021, that Swifty should report from its investment in Nash. SWIFTY INC. Schedule of Income or Loss from Investment For the Year Ended December 31, 2020 2021 2020
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