The beginning balance sheet of New Technology Corporation included the following: Long-Term Investment in MSC Software (equity-method

Question:

The beginning balance sheet of New Technology Corporation included the following:

Long-Term Investment in MSC Software (equity-method investment)................... $619,000

New Technology completed the following investment transactions during the year 2017:

Mar. 16 Purchased 2,000 shares of ATI Inc. as a long-term non-strategic investment, paying

$12.25 per share

May 21 Received cash dividend of $0.75 per share on the ATI investment

Aug. 17 Received cash dividend of $81,000 from MSC Software

Dec. 31 Received annual report from MSC Software. Net income for the year was $550,000.

Of this amount, New Technology's proportion is 22%.

At year-end, the fair values of New Technology's investments are ATI, $25,700, and MSC,

$700,000. The company reports any changes in fair value through net income.

Requirements

1. Record the transactions in the journal of New Technology Corporation.

2. Post entries to the T-account for Long-Term Investment in MSC and determine its balance at December 31, 2017.

3. Show how to report the Long-Term Non-strategic Investment and the Long-Term

Investment in MSC accounts on New Technology's balance sheet at December 31, 2017?

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