Question

The beginning balance sheet of

TextText

Source Co. included

aa

$ 500 comma 000$500,000

investment in

AndyAndy

stock

​(4040​%

​ownership,

TextText

has significant influence over

AndyAndy​).

During the​ year,

TextText

Source completed the following investment​ transactions:

- X More Info Mar. 3 15 May Dec. 15 Purchased 2,000 shares at $10 per share of Ron Software common stock as a long-term equity investment, representing 4% ownership, no significant influence. Received a cash dividend of $0.94 per share on the Ron investment. Received a cash dividend of $90,000 from Andy investment. Received Andy's annual report showing $120,000 of net income. Received Ron's annual report showing $100,000 of net income for the year. Andy's stock fair value at year-end was $458,000. Ron's common stock fair value at year-end was $11 per share. 31 31 31 31

Answer 1

Ledger posting as follows:

Equity Investment-Andy $500,000 Dec. 15 $48.000 Revenue from investments Dec. 31 $90,000 Beg. Bal Dec. 31 $48.000 End. Bal. $458,000 Dividend revenue Equity Investments $20,000 Mar. 03 May. 15 $1.880 End. Bal. $20.000 Fair value Adjustments-Equity investments Dec. 31 $2.000 Unrealized Holdings Gain-Equity Invst. Dec. 31 $2.000 End. Bal. $2.000 End. Bal. $2,000