Reference no: EM131748478

1. On January 16 of Year 1, Wishbone Corporation purchased 2,000 shares of Clarke Corporation common stock at $50 per share. Wishbone classified the investment in Clarke common stock as available for sale. On March 23 of Year 1, Wishbone sold 500 shares of Clarke common stock for $78 per share. On December 31 of Year 1, each of the remaining 1,500 shares of Clarke common stock had a market value of $65. For Year 1, Wishbone Corporation reported net income of $200,000. What would Wishbone's Year 1 net income have been if the investment in Clarke Corporation stock had originally been classified as trading? Note: Assume that, before Year 1, Wishbone Corporation has never had an investment in either trading or available-for-sale securities. Also, ignore income taxes

244,500
183,500
243,500
228,500
222,500

2. On January 1 of Year 1, Taraz Company purchased 4,000 shares of the common stock of Company A for $240,000. At the time, Company A had a total of 10,000 common shares outstanding. Accordingly, Taraz purchased 40% of the outstanding shares of Company A. During Year 1, Company A paid cash dividends totaling $20,000. Company A also reported net income of $50,000 during Year 1. During Year 2, Company A paid no cash dividends. Company A reported a net loss of $40,000 during Year 2. On December 31 of Year 1, the market value of Company A's common stock was $45 per share. On December 31 of Year 2, the market value of Company A's common stock was $72 per share. On Taraz Company's books, what amount should be reported as "Investment in Company A" as of December 31 of Year 2?

$272000
$243000
$260000
$236000
$257000