Required: 1. Assume no significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and income statement of Fair Company at year-end? Required information [The following information applies to the questions displayed below.] As a long-term investment, Fair Company purchased 20% of Midlin Company's 150,000 shares for $180,000 at the beginning of the reporting year of both companies. During the year, Midlin earned net income of $120,000 and distributed cash dividends of $0.30 per share. At year-end, the fair value of the shares is $187,500. Investments Dividend Revenue. Dividend Revenue Unrealized Holding Gain-OCI Investments Cash Answer is complete but not entirely correct. Balance Sheet (Partial) Investments Cash 2. Assume significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and income statement of Fair Company at year-end? Balance Sheet (Partial) $ $ $ $ Income Statement (Partial) 180,000 7,500X 10,800 x Income Statement (Partial) 9,000 7,500
Required: 1. Assume no significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and income statement of Fair Company at year-end? Required information [The following information applies to the questions displayed below.] As a long-term investment, Fair Company purchased 20% of Midlin Company's 150,000 shares for $180,000 at the beginning of the reporting year of both companies. During the year, Midlin earned net income of $120,000 and distributed cash dividends of $0.30 per share. At year-end, the fair value of the shares is $187,500. Investments Dividend Revenue. Dividend Revenue Unrealized Holding Gain-OCI Investments Cash Answer is complete but not entirely correct. Balance Sheet (Partial) Investments Cash 2. Assume significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and income statement of Fair Company at year-end? Balance Sheet (Partial) $ $ $ $ Income Statement (Partial) 180,000 7,500X 10,800 x Income Statement (Partial) 9,000 7,500
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 24E
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answer in text form please (without image)
![Required information
[The following information applies to the questions displayed below.]
As a long-term investment, Fair Company purchased 20% of Midlin Company's 150,000 shares for $180,000 at the
beginning of the reporting year of both companies. During the year, Midlin earned net income of $120,000 and distributed
cash dividends of $0.30 per share. At year-end, the fair value of the shares is $187,500.
Required:
1. Assume no significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and
income statement of Fair Company at year-end?
Investments
Dividend Revenue.
Answer is complete but not entirely correct.
Balance Sheet
(Partial)
Dividend Revenue
Unrealized Holding Gain-OCI
Investments
Cash
Investments
Cash
$
X $
››
$
Balance Sheet
(Partial)
$
2. Assume significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and
income statement of Fair Company at year-end?
$
Income Statement
(Partial)
180,000
7,500 X
10,800 x
Income
Statement
(Partial)
9,000
7,500](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Feef571e6-d228-4cdf-a334-25d26d9a876e%2F76b9eb8d-3444-4c79-8977-4cae859d2134%2F59zs0c_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
As a long-term investment, Fair Company purchased 20% of Midlin Company's 150,000 shares for $180,000 at the
beginning of the reporting year of both companies. During the year, Midlin earned net income of $120,000 and distributed
cash dividends of $0.30 per share. At year-end, the fair value of the shares is $187,500.
Required:
1. Assume no significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and
income statement of Fair Company at year-end?
Investments
Dividend Revenue.
Answer is complete but not entirely correct.
Balance Sheet
(Partial)
Dividend Revenue
Unrealized Holding Gain-OCI
Investments
Cash
Investments
Cash
$
X $
››
$
Balance Sheet
(Partial)
$
2. Assume significant influence was acquired. How will the investment in Midlin Company be reflected in the balance sheet and
income statement of Fair Company at year-end?
$
Income Statement
(Partial)
180,000
7,500 X
10,800 x
Income
Statement
(Partial)
9,000
7,500
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