Week10-Solutions.docx - BE17.10(LO3 Zoop Corporation purchased for $300,000 a 30 interest in Murphy Inc This investment enables Zoop to exert

Week10-Solutions.docx - BE17.10(LO3 Zoop Corporation...

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BE17.10 (LO3) Zoop Corporation purchased for $300,000 a 30% interest in Murphy, Inc. This investment enables Zoop to exert significant influence over Murphy. During the year, Murphy earned net income of $180,000 and paid dividends of $60,000. Prepare Zoop's journal entries related to this investment. BE17.11 (LO4) Hillsborough Co. has a held-for-collection investment in the bonds of Schuyler Corp. with a carrying (and fair) value of $70,000. Due to poor economic prospects for Schuyler, Hillsborough determined that it will not be able to collect all contractual cash flows and the bonds have decreased in value to $60,000. It is determined that this is a permanent loss in value. Prepare the journal entry, if any, to record the reduction in value. BE17.12 (LO4) Presented below are two independent cases related to held-for-collection and selling debt investments. Case 1 Case 2 Amortized cost $40,00 0 $100,00 0 Fair value 30,000 110,000 Expected credit losses 4,000 4,000 For each case, determine the amount of impairment loss, if any, and the journal entry to record the impairment.
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