Pepper Corporation, a public company, reported the following on its July 31, 2016, balance sheet.

Long-term investments at fair value through other comprehensive income

Hegal Ltd. (5,000 common shares).........................................................$36,000

Baudillard Company (8,000 common shares)...............................................18,000

Short-term investments at fair value through profit or loss

Locke Systems Ltd., $70,000 par value, 4% bonds, due

June 30, 2021 (originally purchased at par)................................................68,000

Truman Manufacturing Co. (6,000 common shares)......................................14,000

Long-term investments at amortized cost

Aquinas Filtering Corp., $100,000, 5% bonds, due June 1,

2018, interest payments annually

(originally purchased at 98).................................................................99,000

Investment in associate, Lincoln Corporation (3,000 common shares)...............25,000

The following transactions took place during 2017:

1. Dividends were received from Hegal Ltd.

2. Sold the Locke Systems bonds at a loss.

3. Dividends were received from Lincoln Corporation.

4. Annual interest payment was received from Aquinas Filtering.

5. Dividends were received from Baudillard.

6. Paid dividends to shareholders of Pepper Corporation.

7. Sold the 1,500 Hegal common shares at a loss.

8. Received the financial statements from Lincoln Corporation reporting a profit for the year.

9. Purchased 4,000 additional shares of Baudillard Company.

10. Accrued interest on the Aquinas bonds at year end.

11. Received the financial statements from Aquinas Filtering Corp. reporting a profit for the year.

12. The fair value of Baudillard Company's shares was greater than the carrying value at year end.

13. The fair value of the Aquinas Filtering bonds was less than the carrying value at year end.

14. The fair value of Truman Manufacturing's shares was greater than the carrying value.

15. The fair value of the remaining Hegal common shares was less than the carrying value at year end.

Instructions

Using the following table format, indicate whether each of the above transactions would result in an increase (+), a decrease (-), or no effect (NE) in each category. The first one has been done for you as an example.

TAKING IT FURTHER
Assume instead that Pepper Corporation is a private company. How would your response to the question differ if the company reported under ASPE? What choices would the company have for reporting the investment in an associate?

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Statement of Comprehensive Income Other Comprehensive Income NE Balance Sheet Income Statement Shareholders Revenues Expenses Assets Liabilities Eqity and gains and losses Profit NE NE