Questions -
Q1. Sox Corporation purchased a 35% interest in Hack Corporation for $1,750,000 on January 1, 2016. On November 1, 2016, Hack declared and paid $2.0 million in dividends. On December 31, Hack reported a net loss of $4.3 million for the year. What amount of loss should Sox report on its income statement for 2016 relative to its investment in Hack?
Q2. Assume that, on January 1, 2016, Matsui Co. paid $2,244,000 for its investment in 74,800 shares of Yankee Inc. Further, assume that Yankee has 340,000 total shares of stock issued. The book value and fair value of Yankee's identifiable net assets were both $680,000 at January 1, 2016. The following information pertains to Yankee during 2016:
Net income $340,000
Dividends declared and paid $102,000
Market price of common stock on 12/31/2016 $32/share
What amount would Matsui report in its year-end 2016 balance sheet for its investment in Yankee?
Q3. On July 1, 2016, Tremen Corporation acquired 30% of the shares of Delany Company. Tremen paid $3,080,000 for the investment, and that amount is exactly equal to 30% of the book value of identifiable net assets on Delany's balance sheet. Delany recognized net income of $1,200,000 for 2016, and paid $170,000 of dividends each quarter to its shareholders. After all closing entries are made, Tremen's "Investment in Delany Company" account would have a balance of?
Q4. Oklahoma Oil Corp. paid interest of $780,000 during 2016, and the interest payable account decreased by $121,000. What was interest expense for the year?