On October 1, 2020, Blossom Company purchased 900 of the $1000 face value, 9% bonds of Splish, Inc., for $986000, including accrued interest of $19000. The bonds, which mature on January 1, 2027, pay interest semiannually on January 1 and July 1. Blossom used the straight-line method of amortization and appropriately recorded the bonds as available-for-sale. On Blossom's December 31, 2021 balance sheet, the carrying value of the bonds is

$967000.

$968800.

$953600.

$972600.

Cullumber, Inc. acquired 20% of Marigold Corporation's voting stock on January 1, 2021 for $930000. During 2021, Marigold earned $400000 and paid dividends of $248000. Cullumber's 20% interest in Marigold gives Cullumber the ability to exercise significant influence over Marigold's operating and financial policies. During 2022, Marigold earned $524000 and paid cash dividends of $174000 on April 1 and $174000 on October 1. On July 1, 2022, Cullumber sold half of its stock in Marigold for $684000 cash.

What should the gain be on sale of this investment in Cullumber's 2022 income statement?

$176800.

$219000.

$203800.

$195000.

On January 1, 2021, Crane Company purchased 30% of Ace Corporation's common stock; no goodwill resulted from the purchase. Crane appropriately carries this investment at equity and the balance in Crane's investment account was $930000 at December 31, 2021. Ace reported net income of $580000 for the year ended December 31, 2021, and paid cash dividends on common stock totaling $220000 during 2021. How much did Crane pay for its 30% interest in Ace?

$1038000.

$996000.

$822000.

$1170000.

Carla Vista, Inc. acquired 30% of Metlock Corporation's voting stock on January 1, 2021 for $950000. During 2021, Metlock earned $385000 and paid dividends of $240000. Carla Vista's 30% interest in Metlock gives Carla Vista the ability to exercise significant influence over Metlock's operating and financial policies. During 2022, Metlock earned $485000 and paid cash dividends of $140000 on April 1 and $140000 on October 1. On July 1, 2022, Carla Vista sold half of its stock in Metlock for $645000 cash.

Before income taxes, what amount should Carla Vista include in its 2021 income statement as a result of the investment?

$240000.

$115500.

$72000.

$385000.

On January 1, 2021 Carla Vista Treats, Inc. entered into a franchise agreement with a company allowing the company to do business under Carla Vista Treats' name. Carla Vista Treats had performed substantially all required services by January 1, 2021, and the franchisee paid the initial franchise fee of $930000 in full on that date. The franchise agreement specifies that the franchisee must pay a continuing franchise fee of $79000 annually, of which 20% must be spent on advertising by Carla Vista Treats. What entry should Carla Vista Treats make on January 1, 2021 to record receipt of the initial franchise fee and the continuing franchise fee for 2021?

Prepaid Advertising15800Cash1009000Franchise Fee Revenue930000Franchise Revenue

79000Unearned Franchise Revenue

15800

Cash1009000Franchise Fee Revenue930000Franchise Revenue79000

Cash1009000Unearned Franchise Revenue

1009000

Cash1009000Franchise Fee Revenue930000Revenue Franchise63200Unearned Franchise Revenue

15800

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