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PLEASE SHOW ALL THE WORK AS SAME AS THE WORD DOC. IN THE SECOND PICTURE THE QUESTION BASE ON THE FIRST PICTURE AND REVISE. THANK

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PLEASE SHOW ALL THE WORK AS SAME AS THE WORD DOC. IN THE SECOND PICTURE

THE QUESTION BASE ON THE FIRST PICTURE AND REVISE.

THANK YOU!!!

E2-7 Investment Value Port Company purchased 30,000 of the 100,000 outstanding shares of Sund Company common stock on January 1, 20X2, for $180,000. The purchase price was equal to the book value of the shares purchased. Sund reported the following: Year 20X2 20x3 20X4 Net Income $40,000 30,000 5,000 Dividends $25,000 File Tools View Chap02 HW - Compatibility Mode - Word 5 declares and pays dunds (Show workel) E 2-7 (revised) Accounting for Investment in Equity Se- curities Note: Based on the percentage of ownership, Port does not have control over Sund. So, Port cannot consolidate Sund. Let us assume (1) Port has significance influence over Sund and therefore should use the equity method and (2) Port does not have significance over Sund and therefore should use the fair value through net income method that you have learned in chapter 12 of Spiceland's Intermediate Accounting book. However, let's assume that there is no change in fair value over theses two years so that the fair value method is the same as the "cost method" discussed in chapter 2. 1.Prepare the 20X2 journal entries for Port to record its in- vestment in Sund. If no entries are required, please state so clearly! (Note: You can use numbers in thousands.) - 0) Equity Method (2) Cost Method 2. Assume that Sund declared and paid $10,000 dividends in 20X3, what is the amount of Investment income from Sund and Investment in Sund that Port should report in its 20X3 income statement and balance sheet, respectively, as- suming that Port uses (1) the equity method and (2) the cost method? (1) Equity Medbod (2) Cost Metbed Trivestment income from Sund ( Icowe rarement) l-ivement in Sund (ex balance sheet) 3.If Port uses the equity method of accounting, its retained earnings as of December 31, 20X3 would be higher lower (circle one) by S than if it uses the cost method. (Note: Difference in R/E should be the same as the difference in Investment in S!!!) Show work! 1/1/X2 Sund reports NI Show work!) Screens 1-2 of 10 Focus A 3 - + 14056 0 A F ENG 9:34 PM E2-7 Investment Value Port Company purchased 30,000 of the 100,000 outstanding shares of Sund Company common stock on January 1, 20X2, for $180,000. The purchase price was equal to the book value of the shares purchased. Sund reported the following: Year 20X2 20x3 20X4 Net Income $40,000 30,000 5,000 Dividends $25,000 File Tools View Chap02 HW - Compatibility Mode - Word 5 declares and pays dunds (Show workel) E 2-7 (revised) Accounting for Investment in Equity Se- curities Note: Based on the percentage of ownership, Port does not have control over Sund. So, Port cannot consolidate Sund. Let us assume (1) Port has significance influence over Sund and therefore should use the equity method and (2) Port does not have significance over Sund and therefore should use the fair value through net income method that you have learned in chapter 12 of Spiceland's Intermediate Accounting book. However, let's assume that there is no change in fair value over theses two years so that the fair value method is the same as the "cost method" discussed in chapter 2. 1.Prepare the 20X2 journal entries for Port to record its in- vestment in Sund. If no entries are required, please state so clearly! (Note: You can use numbers in thousands.) - 0) Equity Method (2) Cost Method 2. Assume that Sund declared and paid $10,000 dividends in 20X3, what is the amount of Investment income from Sund and Investment in Sund that Port should report in its 20X3 income statement and balance sheet, respectively, as- suming that Port uses (1) the equity method and (2) the cost method? (1) Equity Medbod (2) Cost Metbed Trivestment income from Sund ( Icowe rarement) l-ivement in Sund (ex balance sheet) 3.If Port uses the equity method of accounting, its retained earnings as of December 31, 20X3 would be higher lower (circle one) by S than if it uses the cost method. (Note: Difference in R/E should be the same as the difference in Investment in S!!!) Show work! 1/1/X2 Sund reports NI Show work!) Screens 1-2 of 10 Focus A 3 - + 14056 0 A F ENG 9:34 PM

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