Reference no: EM132758568
The following data, presented in alphabetical order, are taken from the records of Nieto Corporation.
Accounts payable $ 250,000
Accounts receivable 90,000
Accumulated depreciation-buildings 180,000
Accumulated depreciation-equipment 52,000
Allowance for doubtful accounts 6,000
Bonds payable (10%, due 2025) 400,000
Buildings 900,000
Cash 142,000
Discount on bonds payable 20,000
Equipment 275,000
Goodwill 150,000
Inventory 170,000
Investment in Tabares, Inc. stock (22% ownership) 600,000
Land 520,000
Notes payable (due 2018) 70,000
Patents 50,000
Prepaid insurance 16,000
Salaries payable 23,000
Short-term investment 185,000
Problem 1: Give three main reasons why companies like Nieto Corp. invests in other companies.
Problem 2: What kind of investment does Nieto Corp. hold in Tabares, Inc.? Debt or equity investment? Explain the difference between debt and equity investment .
Problem 3: Given the percentage ownership on Tabares, Inc., can Nieto Corp. exercise influence or control over the management of Tabares, Inc.?
Problem 4: If Bonds Payable were issued at a premium of $20,000, what should Total Liabilities show as a total?
Problem 5: If Bonds Payable were issued at face value, what should Total Liabilities show as a total?
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