What should total liabilities show as a total

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Reference no: EM132747221

Question - Short Essay on Investments and Bonds Payable

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

Required -

1. Give three main reasons why companies like Nieto Corp. invests in other companies.

2. What kind of investment does Nieto Corp. hold in Tabares, Inc.? Debt or equity investment? Explain the difference between debt and equity investment.

3. Given the percentage ownership on Tabares, Inc., can Nieto Corp. exercise influence or control over the management of Tabares, Inc.?

4. If Bonds Payable were issued at a premium of $20,000, what should Total Liabilities show as a total?

5. If Bonds Payable were issued at face value, what should Total Liabilities show as a total?

Reference no: EM132747221

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