Suppose Heyya owns the following investments at December $31,20x6$ :

$($i$)($Click the icon to view additional information.$)$

Requirements

Which method is used to account for each investment?

By how much did each of these investments increase or decrease Heyya's net income during $20$X$6?$

For investments b and c$,$ show how Heyya would report these investments on its Balance Sheet at December $31,20$ X$6.$

More info

Requirement $1.$ Which method is used to account for each investment?

Select the method used to account for each of the three investments:

Investment

Method

a$.$ Heyya United Kingdom $100\%$ owned

b$.$ Investments Heyya is holding to sell

C$.$ Heyya Financing $45\%$ owned

a$.100\%$ of the ordinary shares of Heyya United Kingdom, which holds assets of

$1,500,000$ and owes a total of $1,300,000.$ At December $31,20$X$6,$ the current

exchange rate of the pound $()$ is $1=$$$2\mathrm{.}01.$ The translation rate of the pound

applicable to shareholders' equity is $1=$$$1\mathrm{.}64.$ During $20x6,$

Heyya United Kingdom earned net income of $130,000,$ and the average exchange

rate for the year was $1=$$$1\mathrm{.}92.$ Heyya United Kingdom paid cash dividends of

$30,000$ during $20$X$6.$

b$.$ Investments that Heyya is holding to sell. These investments cost $$1,600,000$ and

declined in value by $$350,000$ during $206,$ but they paid cash dividends of $$25,000$

to Heyya. One year ago, at December $31,205,$ the market value of these

investments was $$1,600,000.$

c$.45\%$ of the ordinary shares of Heyya Financing Associates. During $20$X$6,$

Heyya Financing earned net income of $$500,000$ and declared and paid cash

dividends of $$25,000.$ The carrying amount of this investment was $$500,000$ at

December $31,20$X$5.$