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2.Quiz2Sol - ADM3340A Fall 2008 Quiz#2 Student Name Student...

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ADM3340A Fall 2008 Student Name Suggested Solution Quiz #2 Student ID: ______________________________ Question 1 Steens Corp. acquired a 30% interest in Proctor Co. on January 1, 2009, for $900,000. At that time, Proctor had 2 million of its no-par common shares issued and outstanding. During 2009, Proctor paid cash dividends of $340,000 and thereafter declared and issued a 5% common stock dividend when the market value was $2 per share. Proctor's net income for 2009 was $720,000. What should be the balance in Steen's investment account at the end of 2009? Show all supporting calculations. Cost $ 900,000 Share of net income (.3 x $720,000) 216,000 Share of dividends (.3 x $340,000) (102,000) Balance in investment account $1,014,000 ======== Question 2 On 31 December 2009, XYZ Company owned 10,000 shares of B Company, with a cost of $21 per share and a market value of $26 per share. The shares were purchased in 2009. At the end of 2010, the market value was $29 per share. The investment was sold in 2011 at $33 per share. The investment is classified as a held-for-trading investment. What should be included in other comprehensive income and net income in each of 2009, 2010, and 2011?
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