On January 1, 2021, Lee Company paid $1,870,000 for 80,000 s…

On January 1, 2021, Lee Company paid $1,870,000 for 80,000 shares of Thomas Co.’s voting common stock which represents a 45% investment. No allocation to goodwill or other specific account was necessary. Significant influence over Thomas was achieved by this acquisition. Thomas distributed a dividend of $2.00 per share during 2021 and reported net income of $720,000. What was the balance in the Investment in Thomas Co. account found in the financial records of Lee as of December 31, 2021?

THE NEXT SET OF QUESTIONS IS IN RELATION TO THE SE ASIAN FIN…

THE NEXT SET OF QUESTIONS IS IN RELATION TO THE SE ASIAN FINANCIAL CRISIS.  In the 1990s, SE Asia was starting to rapidly develop. It was a good place to invest, so this led to an appreciation of the Thai Baht that had to be offset with open market operations. 

Kane Inc. owns 30% of Woodhouse Co. and applies the equity m…

Kane Inc. owns 30% of Woodhouse Co. and applies the equity method. During the current year, Kane bought inventory costing $71,500 and then sold it to Woodhouse for $130,000. At year-end, only $30,000 of merchandise was still being held by Woodhouse. What amount of intra-entity gross profit must be deferred by Kane?