During 2012, Its First Year of Operations, Makala Company Purchased

question 99

Essay

During 2012, its first year of operations, Makala Company purchased two available-for-sale investments as follows:
Assume that as of December 31, 2012, the Oceanna Company stock had a market value of $49 per share and Rockledge, Inc. stock had a market value of $20 per share.
Makala had 10,000 shares of no par stock outstanding that was issued for $150,000. For the year ending December 31, 2012, Makala had a net income of $105,000. No dividends were paid.
Required:

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Definitions:

Hydrolyzed

The process of breaking down a compound by chemical reaction with water.

Acidic Conditions

Environments or reactions where there is an excess of hydrogen ions (H+), leading to a pH less than 7.

Hydrolyzed

Describes a chemical process in which a compound reacts with water, resulting in the breaking of a chemical bond and the formation of two or more products.

Basic Conditions

A chemical environment characterized by a pH greater than 7, often used in reactions requiring a deprotonated or negatively charged species.