The following transactions relate to the investment activities of Brown Corporation. The company buys securities that are available for sale when circumstances warrant.

2016

Feb. 1 Acquired Thompson Corporation common shares for $500,000.

March 20 Received $5,000 in dividends from Thompson Co.

Sept. 1 Acquired $600,000 of 10% bonds issued by CM, Inc. at face value. Interest is payable semiannually on March 1 and September 1.

Oct. 30 Sold the Thompson Co. shares for $515,000.

Nov. 1 Purchased Sun Company common shares for $1,500,000.

Dec. 31 Recorded any necessary adjusting entries relating to the investments. The market prices of the investments are:

CM, Inc. bonds $ 540,000

Sun Co. shares 1,580,000

2017

Jan. 15 Sold the Sun Co. shares for $1,585,000.

Mar. 1 Received semiannual interest of $30,000 on the investment in CM, Inc. bonds.

Aug. 15 Acquired Newton Industries common shares for $700,000

Sept. 1 Received semiannual interest of $30,000 on the investment in CM, Inc. bonds.

Dec. 31 Recorded any necessary adjusting entries relating to the investments. The market prices of the investments are:

CM, Inc. bonds $ 525,000

Newton Industries shares 723,000

Requirement 1:

Record the 2016 transactions/events in journal entries or t-accounts.

Assuming the 2016 income from operations was $300,000, compute the 2016 net income, ignoring taxes.

Compute the 2016 comprehensive income.

Show the amounts that Brown will report on its 2016 balance sheet as a result of these investments (other than cash).

Requirement 2:

Record the 2017 transactions/events in journal entries or t-accounts.

Assuming the 2017 income from operations was $300,000, compute the 2017 net income, ignoring taxes.

Compute the 2017 comprehensive income.

Show the amounts that Brown will report on its 2017 balance sheet as a result of these investments (other than cash).

Requirement 3: What amounts related to the investment in Sun Co. did Brown include in 2016 and 2017 net income?

Requirement 4: What amounts related to the investment in Sun Co. did Brown include in 2016 and 2017 other comprehensive income?