Q1. On January 1, 2025, Brew Ha-Ha, a famous coffee company, purchased 32% of the common shares of So Sad Coffee Inc. for $2,200,000. In 2025, So Sad Coffee reported net income of $828,000 and paid dividends of $82,000.

Determine the balance for the investment in So Sad which Brew Ha-Ha Ella Ltd. will report on its balance sheet at December 31, 2025.

• do not round intermediary calculations
• round final answer to nearest whole number
• do not use $ or +/- in your answer

Q2. A bond has a maturity value of $500,000 payable in 3 years. These bonds have a 5% coupon rate payable annually, and the market yield was 2% when the bonds were purchased. How much will be recorded for the bond purchase (ie. initial measurement)?

• do not round intermediary calculations
• round final answer to nearest whole number
• do not use $ or +/- in your answer

Q3. Cod Me Up, a famous seafood wholesaler, had the following transactions relating to its investments during 2025. Cod uses the effective interest method of amortization of premiums or discounts when applicable.

1. On July 1, 2025, Cod acquired a $400,000, 16%, 8-year bond with interest paid semi-annually on January 1 and July 1. The market rate of interest was 12% on that date. The bonds were classified as at amortized cost and had a fair value of $440,000 on December 31, 2025.

What is the amount of interest revenue (if any) Cod would record at December 31, 2025 related to the bond?

• do not round intermediary calculations
• round final answer to nearest whole number
• do not use $ or +/- in your answer

Q4. Big Big Store Ltd. purchased a machine on January 1, 2024, for $600,000. The machine had an estimated useful life of 10 years and an estimated residual value of $10,000. The company uses straight-line depreciation and records monthly depreciation. The machine was sold on December 31, 2029, for $350,000. What was the gain/loss on disposal of the machine?

• gains are positive (ex. 100) and losses are negative (ex. -100)
• do not round intermediary calculations
• round final answer to nearest whole number
• do not use $ in your answer

Q5. Big Corp acquired a machine from Small Company in exchange for 10,000 Big Corp common shares, for which the quoted market price on the stock exchange was $20 per share. The machine was estimated by Big Corp to have a fair market value of $225,000. (Assume that the market price of the shares and the fair value of the machine are equally reliable.) The book value of the machine in Small Co's records was $190,000. At what amount should Big Corp record the machine?

• do not round intermediary calculations
• round final answer to nearest whole number
• do not use $ or +/- in your answer