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question the following transactions relate to the investment activities of brown cor 4289993

Question

The following transactions relate to the investment activities of Brown Corporation. The company buys securities that are available for sale when circumstances warrant 2017 Acquired Thompson Corporation common shares for $500,000. Feb. 1 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 2018 Sold the Sun Co. shares for $1,585,000. Jan. 15 Received semiannual interest of $30,000 on the investment in CM, Inc. bonds. Mar. 1 Aug. 15 Acquired Newton Industries common shares for $700,000 Received semiannual interest of $30,000 on the investment in CM, Inc. bonds. Sept. 1 Dec. 31 Recorded any necessary adjusting entries relating to the investments. The market prices of the investments are: CM, Inc. bonds 525,000 723,000 Newton Industries shares Requirement 1: a. Record the 2017 transactionslevents in journal entries or t-accounts. b. Assuming the 2017 income from operations was $300,000, compute the 2017 net income, ignoring taxes. c. Compute the 2017 comprehensive income. d. Show the amounts that Brown will report on its 2017 balance sheet as a result of these investments (other than cash) Requirement 2 a. Record the 2018 transactions/events in journal entries or t-accounts. Assuming the 2018 income from operations was $300,000, compute the 2018 net income, ignoring taxes. c. Compute the 2018 comprehensive income. d. Show the amounts that Brown will report on its 2018 balance sheet as a result of these investments (other than cash).

 

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