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On January 1, 2025, Giant Co. purchased the following investments for cash: 18,000 shares Rock Co. stock $30,000 35,000 shares Boulder Co. stock $350,000 Both Rock and Boulder have 100,000 common shares outstanding. During 2025, Rock and Boulder had the following information: Net Income Cash Dividends per Share Market Price per Share at 12/31/25 Rock Co. $250,000 $0.25 $1.50 Boulder Co. $500,000 $0.45 $10.70 Instructions: How should each of these investments be accounted for? Explain. For each investment, journalize the following transactions for Giant Co., assuming a December 31 year-end: Purchase of the investments on January 1, 2025. Dividends received from the investments during 2025. Any adjustment for net income earned by the investment. Any adjustment for the investment’s year-end market price. Assume the fair value adjustment account had a $4,000 credit balance prior to any adjustment.

On March 1, Uncle Art mailed a letter to his adult nephew, Neil, that stated: “I am thinking of selling my car, which you have seen and ridden in. I would consider taking $5,000 for it.” On March 3, Neil mailed the following response: “I will buy your car for $5,000 cash.” Uncle Art received this letter on March 5 and on March 6 mailed a note that stated: “It’s a deal.” On March 7, before Neil had received the letter of March 6, he phoned Uncle Art to report that he no longer wanted to buy the car because his driver’s license had been suspended. Which of the following statements concerning this exchange is accurate?

Lando and Oscar, who lived in different suburbs 20 miles apart, were golfing acquaintances at a country club. Lando wrote and signed the following letter, sent to Oscar by United States mail on Friday, October 8: “I need a motorcycle for transportation to the country club, and will buy yours for $1,200 upon your bringing it to my home address above [stated in the letterhead] on or before noon, November 12 next. This offer is not subject to countermand.” Oscar replied in a signed writing by mail the following day: “I accept your offer and promise to deliver the bike as you specified.” Oscar’s letter, although properly addressed, was misdirected by the postal service and not received by Lando until November 10. Lando had bought another motorcycle from Max, a mutual friend, for $1,050 a few hours before. Max saw Oscar at the country club on November 11 and told him that he had sold his motorcycle to Lando the previous day for $1,050, and asked Oscar if he would consider selling his bike to him for $950. Oscar replied, “I’ll let you know in a few days.” On November 12, Oscar took his motorcycle to Lando’s residence; he arrived at 11:55 a.m. Lando was asleep and did not answer his doorbell rings until 12:15 p.m. Lando then rejected Oscar’s bike on the grounds that he had already bought Max’s bike.In a lawsuit by Oscar against Lando for breach of contract, what would the court probably decide regarding Oscar’s letter of October 9?

Lando and Oscar, who lived in different suburbs 20 miles apart, were golfing acquaintances at a country club. Lando wrote and signed the following letter, sent to Oscar by United States mail on Friday, October 8: “I need a motorcycle for transportation to the country club, and will buy yours for $1,200 upon your bringing it to my home address above [stated in the letterhead] on or before noon, November 12 next. This offer is not subject to countermand.” Oscar replied in a signed writing by mail the following day: “I accept your offer and promise to deliver the bike as you specified.” Oscar’s letter, although properly addressed, was misdirected by the postal service and not received by Lando until November 10. Lando had bought another motorcycle from Max, a mutual friend, for $1,050 a few hours before. Max saw Oscar at the country club on November 11 and told him that he had sold his motorcycle to Lando the previous day for $1,050, and asked Oscar if he would consider selling his bike to him for $950. Oscar replied, “I’ll let you know in a few days.” On November 12, Oscar took his motorcycle to Lando’s residence; he arrived at 11:55 a.m. Lando was asleep and did not answer his doorbell rings until 12:15 p.m. Lando then rejected Oscar’s bike on the grounds that he had already bought Max’s bike.What is the probable legal effect of Max’s conversation with Oscar and the report that he (Max) had sold his motorcycle to Lando on November 10?

On June 1, Cattle Rancher Calvin offered to sell his ranch to Derrick Dairy Farmer for $250,000. Derrick Dairy Farmer paid Cattle Rancher Calvin $5,000 to hold the offer open for a period of 30 days. On June 10, Derrick Dairy Farmer wrote to Cattle Rancher Calvin, telling him that he could not pay more than $200,000 for the ranch, and that if he would not agree to accept that amount, he would not go through with the deal. Derrick Dairy Farmer received no reply from Cattle Rancher Calvin. On June 29, Derrick Dairy Farmer mailed a letter to Cattle Rancher Calvin telling him that he accepted his offer to sell the ranch and enclosed a check for $250,000. Cattle Rancher Calvin received this letter on July 5. Has a contract been formed between the parties for the sale of the ranch?

On March 1, South Coast Apartment Complex (SCAC) received a letter from Brrrr, an air conditioner retailer, offering to sell 1,200 window air conditioners suitable for the apartments. The offer stated that it would remain open until March 20, but the acceptance must be received on or before that date. On March 16, SCAC posted a letter of acceptance. On March 17, Brrrr telegraphed SCAC to advise that it was revoking the offer. The telegram reached SCAC on March 17, but SCAC’s letter did not arrive at Brrrr’s address until March 21.As of March 22, which of the following is a correct statement?

Sasha borrowed $10,000 from Morgan to finance a small construction job under a contract with Esther, a homeowner. Sasha gave Morgan a writing that stated, “Any money I receive from Esther will be paid immediately to Morgan, regardless of any demands from other creditors.” Sasha died after completing the job but before Esther paid. Morgan demanded that Esther pay the $10,000 due to Sasha directly to Morgan. Esther refused, saying that she would pay directly to Sasha’s estate everything that she owed Sasha.Is Morgan likely to succeed in an action against Esther for $10,000?

Delilah is a nature-lover and a traveler by hobby. Over the last two years, she has visited some of the most well-known national parks in the country, and has enjoyed collecting rare souvenir postcards from each park, which are only available by visiting the parks. Last year, Delilah lived in New York, and began her travels to national parks. She keeps all her postcards from parks she visited while living in New York in what she calls her “New York portfolio” which includes three postcards, from Yellowstone National Park in Wyoming, Grand Canyon National Park in Arizona, and Sequioa National Park in California. After she visited Sequioa National Park, which was her favorite, she moved to California, and started a new collection that she calls her “California portfolio” which includes three postcards from the parks she visited while living in California: Redwood National Park in California, Joshua Tree National Park in California, and Yosemite National Park in California. Delilah treasures her trips and memories, and keeps each portfolio in a separate box so she can relive her adventures in order. Patrick is starting up a travel agency business, but he has not travelled much himself. He is looking for ways to boost his business by showcasing souvenirs from different popular travel destinations. Patrick puts an advertisement in the local newspaper that says “Travel agency looking for souvenirs from popular destinations to be used as display props. Willing to pay good money.” Patrick includes his contact information in the advertisement. Delilah sees the ad in the newspaper and thinks she might have what Patrick needs. Delilah brings the postcards from both her New York portfolio and her California portfolio, combining them in one box for ease of transport, and shows them to Patrick at his office. She states that she is interested in allowing Patrick to use them as display props if it would help his business, but that she does not want to lose them as they are very precious to her. Patrick looks over the six postcards Delilah brought, and is excited. He particularly likes the postcards from Sequioa National Park and Redwood National Park, as they have beautiful trees that he thinks would be a huge draw. Patrick gets Delilah’s contact information and tells her he’ll be in touch. The next day, Patrick emails Delilah: “Thank you for bringing the postcards by. I would love to rent some of the postcards from you, so I can use them as props but you will still get them back.” Delilah emails back the same day: “That could work. Which postcards are you interested in?” Patrick responds by email: “How about just the California postcards? I’ll pay $50 a month for the next 18 months, that’s $900 total. At the end you get them all back in the same condition.” Delilah emails back immediately: “You’ve got yourself a deal.” The next day, Delilah brings the postcards from her California portfolio – Redwood, Joshua Tree, and Yosemite National Parks. Patrick is disappointed and asks why the Sequioa postcard is missing. Delilah explains that the Sequioa postcard is part of the New York portfolio, because she obtained it while she was living in New York. Patrick states that he wanted the postcards from all the parks in California, and assumed that would include Sequioa National Park. Delilah states she never agreed to give up Sequioa, her favorite, and walks out with all her postcards. Patrick is stunned and asks his lawyer for advice. Does he have a contract with Delilah? If so, which postcards are included? Do not discuss any potential remedies Patrick may have against Delilah.

Dean purchased a vacant site next to a boutique shop in a downtown area. Two months after Dean constructed a parking garage on the site, Miranda, the boutique owner, noticed that cracks were beginning to appear in the basement and along some of the walls of her shop. A city engineer inspected the premises and told Miranda that the land under her building was subsiding. Miranda consulted a contractor who told her it would cost $50,000 to repair the damage and that the damage would not have occurred but for Dean’s construction of a large structure on the adjacent site. Miranda brings suit against Dean for damages. Will Miranda likely prevail?

Stan hired Bob to mow his lawn. While Bob was cutting the grass, he saw something sparkle in the ground. He dug it out and discovered that it was a sapphire set in a gold ring. Which of the following correctly states the relative legal interests of Stan and Bob?