Boulter, Inc. began business on January 1, 20X8. At the end of December 20X8, Boulter had the following investments in debt securities: Trading Available for Sale Cost $60,000 $110,000 Fair value $54,000 $107,500 All declines are considered to be temporary. How much loss will be reported by Boulter, Inc. in the December 31, 20X8, income statement relative to the portfolio?

The equity method of accounting for investments in voting common stock is appropriate when:

On May 1, 2021, Payne Co. issued $1,500,000 of 7% bonds at 103, which are due on April 30, 2031. Twenty detachable stock warrants entitling the holder to purchase for $40 one share of Payne’s common stock, $15 par value, were attached to each $1,000 bond. The bonds without the warrants would sell at 96. On May 1, 2021, the fair value of Payne’s common stock was $35 per share and of the warrants was $2. On May 1, 2021, Payne should record the bonds with a

On January 1, 2021, Gridley Corporation had 375,000 shares of its $2 par value common stock outstanding. On March 1, Gridley sold an additional 750,000 shares on the open market at $20 per share. Gridley issued a 20% stock dividend on May 1. On August 1, Gridley purchased 420,000 shares of treasury stock. On November 1, 600,000 shares were sold for $25 per share. What is the weighted-average number of shares outstanding for 2021?

If a company offers additional considerations to convertible bondholders in order to encourage conversion, it is called a(an): 

On January 1, 2021, Worth Co. issued at par $2,000,000 of 5% convertible bonds. Each $1,000 bond is convertible into 10 shares of common stock. No bonds were converted during 2021. Worth had 200,000 shares of common stock outstanding during 2021. Worth’s 2021 net income was $900,000 and the income tax rate was 30%. Worth’s diluted earnings per share for 2021 would be (rounded to the nearest penny):

On March 1, 2021, Ruiz Corporation issued $2,000,000 of 8% nonconvertible bonds at 104, which are due on February 28, 2041. In addition, each $1,000 bond was issued with 25 detachable stock warrants, each of which entitled the bondholder to purchase for $50 one share of Ruiz common stock, par value $25. The bonds without the warrants would normally sell at 95. On March 1, 2021, the fair value of Ruiz’s common stock was $40 per share and the fair value of the warrants was $2.00. What amount should Ruiz record on March 1, 2021 as paid-in capital from stock warrants?

On January 1, 2021, Ellison Company granted Sam Wine, an employee, an option to buy 1,000 shares of Ellison Co. stock for $30 per share, the option exercisable for 5 years from date of grant. Using a fair value option pricing model, total compensation expense is determined to be $6,000. Wine exercised his option on October 1, 2021 and sold his 1,000 shares on December 1, 2021. Quoted market prices of Ellison Co. stock in 2021 were: July 1   $30 per share October 1   $36 per share December 1  $40 per share The service period is for three years beginning January 1, 2021. As a result of the option granted to Wine, Ellison should recognize compensation expense for 2021 on its books in the amount of

Sox Corporation purchased a 40% interest in Hack Corporation for $1,500,000 on January 1, 20X8. On November 1, 20X8, Hack declared and paid $1 million in dividends. On December 31, Hack reported a net loss of $6 million for the year. How would Sox’s reported net income be impacted in 20X8 because of its investment in Hack?

Proceeds from an issue of debt securities having stock warrants should not be allocated between debt and equity features when