On January 1, Y5, Belmont Inc had 100,000 shares outstanding. On that date, Aylmer Inc purchased 25,000 of the outstanding shares of Belmont Inc On January 1, Y5, Aylmer paid a price of $8.00 per...

Extracted text: On January 1, Y5, Belmont Inc had 100,000 shares outstanding. On that date, Aylmer Inc purchased 25,000 of the outstanding shares of Belmont Inc On January 1, Y5, Aylmer paid a price of $8.00 per share (for Belmont's shares). Both companies have a December 31 year end. Other important information: At December 31, Y5: Aylmer Inc - net income $63,000 Belmont Inc - net income $36,000 Belmont Inc -dividends paid $6,000 Belmont Inc - market price per share $9.50 REQUIRED: 1. Assume Aylmer Inc accounts for the investment as Fair Value thru Net Income (FV-NI). Record all the appropriate transactions for Y5. 2. Assume Aylmer Inc has significant influence and accounts for the investment using the equity method. Record all the appropriate transactions for Y5.


Extracted text: Aylmer Corp has the following transactions relating to investments. Aylmer Corp has a December 31 year end. 01-Sep-19 Aylmer Corp purchased 3,100 shares of Belmont Inc at $13.00 per share. 31-Oct-19 Belmont Inc paid dividends of $5.00 per share. 31-Dec-19 Belmont Inc shares had a fair value of $12.00 per share. 31-Dec-19 Belmont Inc reported net income of $63,000 for the year. 01-Mar-20 Aylmer Corp sold all of Belmont Inc shares for $17.00 per share. Additional Information: Assume Aylmer Corp uses the fair value through other comprehensive income (FV-OCI) method to account for its investments. Dividend income is required to be recorded in a separate account. REQUIRED: Prepare the appropriate entries for the above transactions.