Windsor Corporation paid $760,000 for a 35-percent investment in the common shares of Semmi Systems Inc. For

Question:

Windsor paid $760,000 for a 35-percent investment in the common shares of Semmi Systems Inc. For the first year, Semmi Systems Inc. reported net income of $360,000 and at year end declared and paid cash dividends of $105,000. On the date, the fair value of Windsor Corporation's investment in Semmi Systems Inc. shares was $780,000.
Required
1. Which method is appropriate for Windsor to use in accounting for its investment in Semmi Systems Inc.? Why?
2. Show everything that Windsor would report for the investment and any investment revenue in its year-end financial statements.
3. What role does the fair value of the investment play in this situation?
Balance Sheet
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