On January 2, 2020, Carlson Corporation made several investments in debt and equity securities of other companies. The f
Posted: Thu May 05, 2022 8:04 am
- On January 2 2020 Carlson Corporation Made Several Investments In Debt And Equity Securities Of Other Companies The F 1 (229.12 KiB) Viewed 43 times
dividends?
a. Cash
b. Dividend revenue
c. Investments
d. No credit
On January 2, 2020, Carlson Corporation made several investments in debt and equity securities of other companies. The following table summarizes relevant information about Carlson Corporation's investments and the investee companies. Company A Company B Trading Trading Company C Available-for- Company D Equity Investment Classification Sale Percent of Investee Owned 10% 15% N/A 25% Cost of investment at $8,000,000 150,000 ? 60,000,000 acquisition Book Value of Investee's 70,000,000 800,000 4,700,000 180,000,000 Equi 2020 Net Income (Loss) 70,000 (10,000) 80,000 120,000 2020 Dividends 10,000 2,000 15,000 50,000 8,020,000 145,000 2,800,000 60,200,000 Market Value of Investments on December 31, 2020 "Company C investment" is a bond that was purchased from Company C with a face value of $3,000,000 and a coupon rate of 10% paid annually on December 31 for the next 8 years. The market rate on January 2, 2020 (when this bond was issued) was 12%. On January 2, 2020, Company D owned a building with a fair value $20,000,000 higher than its book value (remaining useful life 20 years), a patent with a fair value $5,000,000 higher than its book value (remaining useful life 10 years), and a piece of land with a fair value $10,000,000 higher than its book value (indefinite useful life). The book values of all other assets and liabilities of Company D are equal to their market value. Carlson elected not to exercise the SFAS 159 Fair Value Option for any of its investments.