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On January 1, 20x1, JME invested in the common stock of KMJ, Inc.Certain data for 20X1 and 20X2 are as follows - year shares bought

On January 1, 20x1, JME invested in the common stock of KMJ, Inc.Certain data for 20X1 and 20X2 are as follows -

year shares bought Total shares Cost / share KMJ book value/share KMJ's total income KMJ's total dividends KMJ's 12/31 Mkt value/share

20X1 6,000 24,000 $90 $78 $550,000 $300,000 $95

20X2 n/a 24,000 n/a n/a $614,200 $273,300 $109

1 - JME has no other investment securities (disregard Requirements #1 and #2 information)

2 - These are securities are NOT intended for resale, and JME is now represented on KMJ's Board of Directors

3 - The cost paid above the book value is NOT attributable to any specific account - it is considered Goodwill

4 - No investments were sold in 20X1 or in 20X2

5 - You may ignore taxes

1 - What percentage ownership does JME have with regard to KMJ? __________

2 - What amount of Goodwill should be amortized in 20X1?---------------

what amount in 20X2?

3 - , explain whichGAAP pronouncementjustifies your answer to #2 above - be somewhat specific with yourcitation.

4 - Compute the balance in JME's Investment in KMJ account, showing computations, at 12/31/X1 ______________

5 - Compute the balance in JME's Investment in KMJ account, showing computations, at 12/31/X2 _____________

6 - Compute (showing computations) the income to JME from the investment in KMJ for 20X1

7 - Compute (showing computations) the income to JME from the investment in KMJ for 20X2

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