Requirement 1. Identify the appropriate accounting methad for each of the following situations: Accounting Method f the investee company's stock of which the investor has significant influence a. Investment in 30% b. Available-for-sale debt investment Investment in more than 50 % of the investee company's stock c. five vears. The investor plans to hold the bond for the full d. Bond investment that matures five years. Requirement 2. At what amount should the following trading investment portfolio be reported on the December 31, 2018, balance sheet? Journalize any adjusting entry required December 31. E(Click the icon to review the trading investment portfolio.) on the December 31, 2018 balance sheet. The total trading investment portfollo should be reported at $ December 31. (Record debits first, then credits. Select the explanation on the last line the Accournts and fthe journal entry table. If no entry is required, select "No entry required" on the first line Evolonations column and leave the remaining cells blank. Accounts and Explanations Debit Date Credit Data Table 2018 Dec. 31 Bond Investment Cost Current Market Value Violet 2.500 S 3.200 Amber 61.800 53.700 3.560 5,860 Brunet 67.860 5 S 62.760 Totals Choose from any list or enter any number in the input fields and then continue the next question. Requirement 3. An investor paid $72,500 on January 1, 2018, to acquire 35 % of Fakie Boy, Inc.'s outstanding common stock. The investor had significant control of Fakie- Boy, Inc. For the year endind December 31, 2018, Fakie Boy's net income was $70,000, and on June 14, the company declared and paid cash dividends of $60,000 to all stockholders. Journalize the investor's transactions related to the Fakie Boy investment: (a) purchase of the investment, (b) receipt of dividends, (c) investor's share entry required net income, and (d) sale of Fakie- Boy stock for $79,000 on January 3, 2019. (Record debits first, then credits. Select the explanation Accounts and Explanations column and leave the remaining cells blank.) the last line of the journal entry table. If no entry is required, select "No a first line acquire 35% of Fakie- Boy, Inc.'s outstanding common stock Begin by journalizing the investor's purchase of the Fakie -Boy investment An investor paid $72,500 on January 1, 2018, Credit Date Accounts and Explanations Debit 2018 (a) Jan. (b) Journalize the receipt of dividends. On June 14, Fakle-Boy declared and paid cash dividends of S60,000 to all stockholders. Accounts and Explanations Date Debit Credit 2018 (b) Jun. 14 (c) Journalize the investor's share of net income. During the first year, Fakie - Boy's net income was $70,000. Accounts and Explanations Date Debit Credit 2018 (c) Dec. 31 (d) Journalize the sale of Fakie Boy stock for $79,000 on January 3, 2019. Date Accounts and Explanations Debit Credit 2019 (d) Jan. 3 Requirement 1. Identify the appropriate accounting methad for each of the following situations: Accounting Method f the investee company's stock of which the investor has significant influence a. Investment in 30% b. Available-for-sale debt investment Investment in more than 50 % of the investee company's stock c. five vears. The investor plans to hold the bond for the full d. Bond investment that matures five years. Requirement 2. At what amount should the following trading investment portfolio be reported on the December 31, 2018, balance sheet? Journalize any adjusting entry required December 31. E(Click the icon to review the trading investment portfolio.) on the December 31, 2018 balance sheet. The total trading investment portfollo should be reported at $ December 31. (Record debits first, then credits. Select the explanation on the last line the Accournts and fthe journal entry table. If no entry is required, select "No entry required" on the first line Evolonations column and leave the remaining cells blank. Accounts and Explanations Debit Date Credit Data Table 2018 Dec. 31 Bond Investment Cost Current Market Value Violet 2.500 S 3.200 Amber 61.800 53.700 3.560 5,860 Brunet 67.860 5 S 62.760 Totals Choose from any list or enter any number in the input fields and then continue the next question. Requirement 3. An investor paid $72,500 on January 1, 2018, to acquire 35 % of Fakie Boy, Inc.'s outstanding common stock. The investor had significant control of Fakie- Boy, Inc. For the year endind December 31, 2018, Fakie Boy's net income was $70,000, and on June 14, the company declared and paid cash dividends of $60,000 to all stockholders. Journalize the investor's transactions related to the Fakie Boy investment: (a) purchase of the investment, (b) receipt of dividends, (c) investor's share entry required net income, and (d) sale of Fakie- Boy stock for $79,000 on January 3, 2019. (Record debits first, then credits. Select the explanation Accounts and Explanations column and leave the remaining cells blank.) the last line of the journal entry table. If no entry is required, select "No a first line acquire 35% of Fakie- Boy, Inc.'s outstanding common stock Begin by journalizing the investor's purchase of the Fakie -Boy investment An investor paid $72,500 on January 1, 2018, Credit Date Accounts and Explanations Debit 2018 (a) Jan. (b) Journalize the receipt of dividends. On June 14, Fakle-Boy declared and paid cash dividends of S60,000 to all stockholders. Accounts and Explanations Date Debit Credit 2018 (b) Jun. 14 (c) Journalize the investor's share of net income. During the first year, Fakie - Boy's net income was $70,000. Accounts and Explanations Date Debit Credit 2018 (c) Dec. 31 (d) Journalize the sale of Fakie Boy stock for $79,000 on January 3, 2019. Date Accounts and Explanations Debit Credit 2019 (d) Jan. 3
