Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with this, this is all of it Student Name: CHAPTER 17 HANDOUT INVESTMENTS POINTS 16 Points BACKGROUND Johnson Controls is a manufacturing

image text in transcribedimage text in transcribed

Please help me with this, this is all of it

image text in transcribedimage text in transcribedimage text in transcribed
Student Name: CHAPTER 17 HANDOUT INVESTMENTS POINTS 16 Points BACKGROUND Johnson Controls is a manufacturing company and had the following investment related activities during 20Y3: 1 . The company purchased Jones & Co.'s 5-year, 5%, $100,000 bond. The bond was purchased on January 1, 20Y3 for $95,788 to yield 6% interest. The bond pays annual interest on December 31. Johnson is holding the investment as available-for-sale. At December 31, 20Y3, the bond had a fair market value of $97,500. 2 . The company purchased 6,000 shares of Dobson Lid. common stock at a cost of $255,000 on July 31, 20Y3. These shares do not give Johnson significant influence over Dobson. On October 31, 20Y3, Dobson Lid. paid a $2 per share cash dividend. At December 31, 20Y3, Dobson Lid. was trading at $40 a share. 3. On January 1, 20Y3, the company invested in Rothrock Industries by acquiring 30% of Rothrock's outstanding stock for $21,500,000. During 20Y3, Rothrock Industries reported net income of $5,000,000 and paid cash dividends totaling $1,000,000. At December 31, 20Y3, Rothrock Industries had a market value of $75,000,000. Note: Ignore any excess price issues. REQUIRED Using the following templates, show how each of the above transactions impacted Johnson's cash flows, income, and balance sheet for 20Y3. Round all amounts to the nearest whole dollar. View each column as a standalone analysis of each investment type. Do not show their cumulative changes like we do in other activities and handouts. Some lines might not have answers. List account names or transaction descriptions in the first column and amounts in the remaining columns. NOTE: The t-accounts are not required, but it is strongly suggested that you work the problems using t- accounts first and then transfer your answers to the appropriate financial statements.\fIMPACT ON CURRENT PERIOD CASH FLOW Jones & Co Dobson Ltd. Rothrock Industries Net Impact on Current Period Cash Flow Jones & Co Dobson Ltd. Rothrock Industries Net Impact on Current Period Earnings ASSETS: Jones & Co Dobson Ltd. Rothrock Industries Change in Assets LIABILITIES + EQUITY: Change in Liabilities + Equity CHAPTER 17 HANDOUT | PAGE 3

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamental Managerial Accounting Concepts

Authors: Thomas Edmonds

6th Edition

78110890, 978-0078110894

More Books

Students also viewed these Accounting questions