Smith buys and sells securities, which it typically classifies as available for sale. On December 15, 2016, Smith purchased $515,000 of Jones shares and elected the fair value option to account for the Jones investment. As of December 31, 2016, the Jones shares had a fair value of $586,000. In the 2016 financial statements, Smith will report (ignore taxes):

An investment in Jones of $515,000.

Accumulated other comprehensive income of $586,000.

Other comprehensive income of $71,000.

Investment income of $71,000 in its income statement.

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Wang Corporation purchased $180,000 of Hales Inc. 7% bonds at par with the intent and ability to hold the bonds until they matured in 2020, so Wang classifies its investment as held to maturity. Unfortunately, a combination of problems at Hales and in the debt market caused the fair value of the Hales investment to decline to $143,000 during 2016. Wang views this decline as an other-than-temporary (OTT) impairment. Wang calculates that, of the $37,000 drop in fair value, $15,000 of it relates to credit losses and $22,000 relates to non-credit losses. If Wang accounts for the Hales bonds under IAS No. 39, before-tax net income for 2016 will be reduced by:

$0.

$22,000.

$15,000.

$37,000.

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Nichols Corporation purchased $130,000 of Holly Inc. 7% bonds at par with the intent and ability to hold the bonds until they matured in 2020, so Nichols classifies its investment as held to maturity. Unfortunately, a combination of problems at Holly and in the debt market caused the fair value of the Holly investment to decline to $99,000 during 2016. Nichols calculates that, of the $31,000 decrease in fair value, $14,000 of it relates to credit losses and $17,000 relates to noncredit losses.

Assume that Nichols concludes that the Holly bonds are other-than-temporarily impaired because Nichols believes it is more likely than not that it will have to sell the Holly bonds before the bonds have a chance to recover their fair value. Before-tax net income for 2016 will be reduced by:

$0.

$14,000.

$31,000.

$17,000.

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On January 2, 2015, Howdy Doody Corporation purchased 14% of Ranger Corporation's common stock for $57,000 and classified the investment as available for sale. Ranger's net income for the years ended December 31, 2015 and 2016, were $13,000 and $55,000, respectively. During 2016, Ranger declared and paid a dividend of $64,500. There were no dividends in 2015. On December 31, 2015, the fair value of the Ranger stock owned by Howdy Doody had increased to $72,000. How much should Howdy Doody show in the 2016 income statement as income from this investment?

$15,000.

$9,030.

$24,030.

$21,000.

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On July 1, 2016, Tremen Corporation acquired 30% of the shares of Delany Company. Tremen paid $3,160,000 for the investment, and that amount is exactly equal to 30% of the book value of identifiable net assets on Delany's balance sheet. Delany recognized net income of $1,400,000 for 2016, and paid $180,000 of dividends each quarter to its shareholders. After all closing entries are made, Tremen's "Investment in Delany Company" account would have a balance of:

$3,370,000.

$3,262,000.

$3,526,000.

$3,634,000.

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Bloomfield Bakers accounts for its investment in Clor Confectionary under the equity method. Bloomfield carried the Clor investment at $150,050 and $165,650 at December 31, 2015 and 2016, respectively. During 2016 Clor recognized $75,600 of net income and paid dividends of $20,600. Assuming that Bloomfield owned the same percentage of Clor throughout 2016, their percentage ownership must have been (Round your answer to the nearest whole percent):

28%.

76%.

21%.

26%.

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On April 1, 2016, BigBen Company acquired 30% of the shares of LittleTick, Inc. BigBen paid $199,000 for the investment, which is $52,000 more than 30% of the book value of LittleTick's identifiable net assets. BigBen attributed $14,900 of the $52,000 difference to inventory that will be sold in the remainder of 2016, and the rest to goodwill. LittleTick recognized a total of $20,000 of net income for 2016, and paid total dividends for the year $10,700; these dividends were issued quarterly. BigBen's investment in LittleTick will affect BigBen's 2016 net income by (Round your answer to nearest whole dollar amount):

Earnings of $4,500.

Earnings of $3,150.

A loss of $10,400.

Earnings of $1,350.