Acme Corp. has a portfolio of investments purchased at the amounts shown below at December 31, 2013. Acme is a private company but is contemplating going public.
1. 10% interest in Plato purchased on January 1, 2013
(fair value of the 10% interest on December 31, $16,000)........ $ 17,000
2. 40% interest in Bloor purchased five years ago for $250,000.
During this period of ownership, Bloor’s retained earnings has grown
$70,000. The fair value of the investment at
December 31 is 280,000. ...................... 250,000
3. 50% interest in a joint venture, Rand, purchased January 1, 2013.
During the ownership period, Rand had income of $40,000 and paid
dividends of $10,000. ....................... 120,000
Required
(a) Calculate the balances to be reflected on the Acme December 31, 2013, statement of financial position in accordance with ASPE.
(b) What will be different in the reporting of these investments for Acme if it were to become a public company?