Reference no: EM132762168

The following data, presented in alphabetical order, are taken from the records of Nieto Corporation.

Accounts payable $ 250,000

Accounts receivable 90,000

Accumulated depreciation-buildings 180,000

Accumulated depreciation-equipment 52,000

Allowance for doubtful accounts 6,000

Bonds payable (10%, due 2025) 400,000

Buildings 900,000

Cash 142,000

Discount on bonds payable 20,000

Equipment 275,000

Goodwill 150,000

Inventory 170,000

Investment in Tabares, Inc. stock (22% ownership) 600,000

Land 520,000

Notes payable (due 2018) 70,000

Patents 50,000

Prepaid insurance 16,000

Salaries payable 23,000

Short-term investment 185,000

Problem 1: Give three main reasons why companies like Nieto Corp. invests in other companies.

Problem 2: What kind of investment does Nieto Corp. hold in Tabares, Inc.? Debt or equity investment? Explain the difference between debt and equity investment .

Problem 3: Given the percentage ownership on Tabares, Inc., can Nieto Corp. exercise influence or control over the management of Tabares, Inc.?

Problem 4: If Bonds Payable were issued at a premium of $20,000, what should Total Liabilities show as a total? USE THE DATA TAKEN FROM THE RECORDS OF NIETO CORP AND SHOW CALCULATION

Problem 5: If Bonds Payable were issued at face value, what should Total Liabilities show as a total?