On January 1, Vermillion Corporation, a private company that reports under ASPE, purchased 25% of Hook Ltd. common shares for $731,000. At December 26, Hook declared a $40,000 dividend (Vermillion received its share of that dividend on the same day) and reported net income of $72,000. The shares' fair value at December 31 was $769,000. It has chosen to account for its investment in Hook Ltd, using the cost model because the shares do not trade in an active market. Record each of the transactions and any necessary adjusting journal entries under this assumption. (List all debit entries before credit entries, Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Jan 1 # Dec. 26: Account Titles and Explanation How much income would Vermillion now report for the year? Income $ Debit Credit

Lauralee, Inc. owns a 30% interest in Eastwood Co., giving it representation on the investee’s board of directors. At the beginning of the year, the Equity Investment was carried on Lauralee’s balance sheet at $500,000. During the year, Eastwood reported net income of $250,000 and paid Lauralee a dividend of $50,000. In addition, Lauralee sold inventory to Eastwood, recording a gross profit of $20,000 on the sale. At the end of the year, 50% of the merchandise remained unsold by Eastwood. Required: a. Prepare the equity method journal entry to defer the unrealized inventory gross profit.b. How much equity income should Lauralee report from Eastwood during the year?c. What is the balance in the Equity Investment at the end of the year?

As a long-term investment, Painters' Equipment Company purchased 20% of AMC Supplies Incorporated's 430,000 shares for $510,000 at the beginning of the fiscal year of both companies. On the purchase date, the fair value and book value of AMC's net assets were equal. During the year, AMC earned net income of $280,000 and distributed cash dividends of 15 cents per share. At year-end, the fair value of the shares is $538,000. Required: 1. Assume no significant influence was acquired. Prepare the appropriate journal entries from the purchase through the end of the year. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. View transaction list Journal entry worksheet 1 2 3 4 Record the purchase of AMC Supplies shares for $510,000 as a long-term investment. Note: Enter debits before credits. Transactions General Journal Debit Credit

As a long-term investment at the beginning of the fiscal year, Florists International purchased 40% of Nursery Supplies Inc.'s 6 million shares for $50 million. The fair value and book value of the shares were the same at that time. The company realizes that this investment typically would be accounted for under the equity method, but instead chooses the fair value option. During the year, Nursery Supplies earned net income of $30 million and distributed cash dividends of $1.25 per share. At the end of the year, the fair value of the shares is $46 million. Required: 1. How would this investment be classified on Florists balance sheet? Trading securities Held-to-maturity security Significant-influence investment Other securities 2. Prepare all appropriate journal entries related to the investment during 2016. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered…