Shoreline Corporation Had $3,000,000 of $10 Par Value Common Stock

question 17

Essay

Shoreline Corporation had $3,000,000 of $10 par value common stock outstanding on January 1,2012,and retained earnings of $1,000,000 on the same date.During 2012,2013,and 2014,Shoreline earned net incomes of $400,000,$700,000,and $300,000,respectively,and paid dividends of $300,000,$550,000,and $100,000,respectively.
On January 1,2012,Pebble purchased 21% of Shoreline's outstanding common stock for $1,240,000.On January 1,2013,Pebble purchased 9% of Shoreline's outstanding stock for $510,000,and on January 1,2014,Pebble purchased another 5% of Shoreline's outstanding stock for $320,000.All payments made by Pebble that are in excess of the appropriate book values were attributed to equipment,with each block depreciable over 20 years under the straight-line method.
Required:
1.What is the adjustment to Investment Income for depreciation expense for Pebble's investment in Shoreline in 2012,2013,and 2014?
2.What will be the December 31,2014 balance in the Investment in Shoreline account after all adjustments have been made?

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Definitions:

Priority Rules

Guidelines used in manufacturing and project management to determine the order in which tasks or jobs should be executed based on their importance.

Process Time

The duration it takes to complete a specific task or operation from start to finish in a manufacturing or service process.

LPT

Shortest Processing Time, a rule used in job sequencing to minimize the total processing time by scheduling jobs in ascending order of their processing times.