On November 3, 2025, Coot Corporation purchased common share…

Questions

On Nоvember 3, 2025, Cооt Corporаtion purchаsed common shаres of three companies, with the investments to be accounted for at FV-OCI. The purchases are as follows:                               Fair Value and Cost at AcquisitionLark Company            $241,400Warbler Ltd.                 327,000Egret Corp.                  154,100Total cost                   $722,500 In addition, the carrying amounts (and cost), fair values, and unrealized gains and losses at December 31, 2025, for Coot’s FV-OCI investments are noted below.                                                      FV-OCI Investment Portfolio December 31, 2025Investments in Shares        Carrying Amount    Fair Value    Holding Gain/(Loss) for PeriodLark Company                             $241,400        $257,300        $15,900Warbler Ltd.                                  327,000          313,400        (13,600)Egret Corp.                                   154,100          115,000         (39,100)Total of portfolio                        $722,500        $685,700       $(36,800) Now assume that Coot sells all of its Lark Company common shares on January 23, 2026, receiving proceeds of $287,400. This is $30,100 more than the current carrying amount of the Investment in Lark Company in the accounts. Prepare the journal entries to record the revaluation and sale of the shares.

Edith Cаrоlinа is president оf the Deed Cоrporаtion. The company is decentralized, and leaves investment decisions up to the discretion of the division managers. Michael Sanders, manager of the Cosmetics Division, has had a return on investment of 14% for his division for the past three years and expects the division to have the same return in the coming year. Sanders has the opportunity to invest in a new line of cosmetics which is expected to have a return on investment of 12%. The company's minimum required rate of return is 8%. Suppose Deed Corporation evaluates managerial performance using return on investment. What action would Edith Carolina (company president) and Michael Sanders (division manager) prefer with respect to the decision of whether to take on the new cosmetics line?