Problem #$1$

Fair Value Accounting for Equity Investments

On September $30,2022,$ the Christensen Corporation purchased the following investments in other corporations common and preferred stock:

Green Inc. $,1,000$ shares of common stock, no par. Paid $$100$ per share.

Xie Inc. $,2,000$ shares of preferred stock, $$20$ par. Paid $$20$ per share.

At the end of $2022,$ which is also the end of Christensen Corporation's fiscal year, Green Inc. market price was $$110$ per share and Xie Inc.$\text{'}$s market price was $$13$ per share.

On April $30,2023,$ Christensen Corporation received from Green Inc. dividends of $$2$ per share and from Xie Inc. dividends of $$1$ per share. On July $31,2023,200$ shares of Green were sold for $$115$ per share. At the end of $2023,$ Green Inc. market price was $$90$ per share and Xie Inc.$\text{'}$s market price was $$19.$

REQUIRED:

a$)$ Record the purchase of the Green Inc. and Xie Inc. share on September $30,2022.$

b$)$ Record the fair value of the share at the end of $2022$ for Christensen Corporation.

c$)$ Indicate how these investments would affect Christensen Corporation's income statement and balance sheet for $2022.$

d$)$ Record all journal entries for $2023.$

e$)$ Indicate how these investments would affect Christensen Corporation's income statement and balance sheet for $2023.$