Answered step by step
Verified Expert Solution
Question
1 Approved Answer
During 2019, Investor Co. made the following purchases: On January 1. 2019. purchased 50 Atlazine Corp. 4% bonds at par. Each bond has a
During 2019, Investor Co. made the following purchases: On January 1. 2019. purchased 50 Atlazine Corp. 4% bonds at par. Each bond has a S1.000 face value, pays coupons every June 30 and December 31, and matures on December 31. 2028. On October 1, 2019, purchased 80 Reliavent inc. Sie bonds at par. Each bond has a $1.000 face value, pays coupons every March 31 and September 30, and matures on March 31, 2037. On November 1, 2019. purchased 1,000 of the 5,000,000 outstanding shares of Webdoc inc. common stock for $54 per share. The maniagement of Investor Co. classifies the Arlazine bonds as helid-to-maturity and the ReliaVent bonds as available-for-sale. The Webdoc investment is not large enough for significant influence. The December 31, 2019, fair values of the investments were as follows: Atlazine bonds: $980 each (e. "at 98) Reliavent bonds: 5990 each (.e. "at 99) Webdoc stock: $58 per share The December 31, 2020, fair values of the investments were as follows: Atlazine bonds: $1.010 each (e. "at 1017 Reliavent bonds: $970 each (at 97) Webdoc stock: S61 per share During 2021, Investor Co. sold its entire investment in Webdoc stock for $59 per share. The December 31, 2021, fair values of the remaining investments were as follows: Atlazine bonds: 5990 each (ie. "at 99") Reliavent bonds: $200 each (e. "at 20) As of December 31, 2021, Investor Co's management views the decline in value of the ReliaVent bonds as an impairment. What is the aggregate value of the three investment asets that Investor Co. would report on its December 31, 2012 balance sheet? S184,000 S186,200 O $187,000 S187,200 $188,000 QUESTION 2 Refer to the information in question #1. Ignoring taxes, what is the effect of the investments on Investor Corp.'s reported income on its income statement for 2019? O $5,200 increase $6,000 increase o $6,200 increase $7,000 increase $10,000 increase QUESTION 3 Refer to the information in question #1. What is the aggregate value of the three investment assets that Investor Co. would report on its December 31, 2020 balance sheet? S184,000 S188,600 O $189,100 $191,000 $191,500 QUESTION 4 Refer to the information in question #1. Ignoring taxes, what is the effecet of the investments on Investor Co.'s reported income on its income statement for 2020? O $6,000 increase $6,600 increase $7,100 increase O $9,000 increase $9,500 increase QUESTION 5 Refer to the information in question #1. What is the aggregate value of the two remaining investment assets that Investor Co, would report on its December 31, 2021 balance sheet? S63,500 O $65,500 O $66,000 O $125,000 O $130,000 QUESTION 6 Refer to the information in question #1. Ignoring taxes, what is the effect of the investments on Investor Co.'s reported income on its income statement for 2021? O $64,000 decrease O S60,000 decrease O $53,000 decrease O $4,000 increase O S11,000 increase
Step by Step Solution
★★★★★
3.44 Rating (151 Votes )
There are 3 Steps involved in it
Step: 1
question 6 Classification C...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started