Chapter A, Problem 7P

1.

To determine

Identify the method used by Company C to account the investment in Corporation S under Case A and Case B

2a.

To determine

Journalize the purchase of investment in Company C stock for Case A and Case B

b.

To determine

Journalize the income reported by Corporation S, for Case A and Case B

c.

To determine

Journalize the dividends paid by Corporation S, for Case A and Case B

d.

To determine

Journalize the adjusting entry for the changes in fair value, for Case A and Case B

3a.

To determine

The amounts related to investments, reported on the balance sheet of Company C

b.

To determine

Identify the revenue related to investments, reported on the income statement of Company C

4.

To determine

Explain the reasons for the differences between the Case A and Case B investments