During 2012, Blaylock Corp. made the following purchases:
The management of Blaylock classifies the Patterson bonds as available-for-sale and the AHI bonds as held-to-maturity. The Ogel investment is not large enough for significant influence.
The December 31, 2012, fair market values of the investments were as follows:
The December 31, 2013, fair market values of the investments were as follows:
During 2014, Blaylock sold its entire investment in Ogel stock for $75 per share. The December 31, 2014, fair market values of the remaining investment were as follows:
As of December 31, 2014, Blaylock’s management views the decline in value of the Patterson bonds as an impairment.
What is the aggregate value of the three investment assets that Blaylock would report on its December 31, 2012 balance sheet?
Ignoring taxes, what is the effect of the investments on Blaylock’s reported income for 2012?
a. $7,800 increase
b. $10,100 increase
c. $11,100 increase
d. $12,800 increase
e. $18,200 increase
What is the aggregate value of the three investment assets that Blaylock would report on its December 31, 2013 balance sheet?
Ignoring taxes, what is the effect of the investments on Blaylock’s reported income for 2013?
a. $14,400 increase
b. $15,300 increase
c. $16,200 increase
d. $17,300 increase
e. $18,200 increase
What is the aggregate value of the two remaining investment assets that Blaylock would report on its December 31, 2014 balance sheet?
Ignoring taxes, what is the effect of the investments on Blaylock’s reported income for 2014?
a. $51,800 decrease
b. $50,800 decrease
c. $42,800 decrease
d. $12,200 increase
e. $20,200 increase
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