On January 1st 2016 the Snoke Company purchased 100 of the 1000 shares of The First Order Company stock for $6000 At this time Snoke has no influence over The First Order.

On July 1st The First Order paid a $1 per share dividend

On December 31st The First order reported income for 2016 of $5000 and its stock was selling for $63 per share

On January 2nd 2017 the Snoke Company purchased another 100 shares of The First Order stock for $6500 With this second purchase, Snoke now has significant influence over The First Order. Any excess of purchase price over book value of assets is attributable to goodwill.

On July 1st The First Order paid a $1 per share dividend

On December 31st The First Order reported income for 2017 of $9000 and its stock was selling for $61 per share

On July 1st 2018, The First Order announced that they were not paying any dividends this year

On December 31st The First Order reported a loss for 2018 of $4000 and its stock was selling for $58 per share

On January 3rd 2019 the Snoke Company sold 1/2 (100 shares) of its investment in The First Order at $59 per share. With this sale Snoke no longer has any influence over The First Order.

On July 1st The First Order paid a $2 per share dividend

On December 31st The First Order reported income of $1000 and its stock was selling for $57 per share

On January 5th 2020 the Snoke Company sold its remaining stock in The First Order at $58 per share.

REQUIRED:

A) PREPARE ALL THE NECESSARY JOURNAL ENTRIES FOR SNOKE IN 2016 THROUGH 2020

B) FOR EACH YEAR DETERMINE

1) THE BOOK VALUE OF THE INVESTMENT IN THE FIRST ORDER

2) THE BALANCE IN THE UNREALIZED HOLDING GAIN OR LOSS ACCOUNT (IS IT AN UNREALIZED GAIN OR LOSS)

3) THE INCOME STATEMENT IMPACT OF THE INVESTMENT

2016 2017 2018 2019

Investment in First Order

Unrealized holding gain/loss

Impact on income