On January 1, Jackson Acquired Common Stock of Williams Company

Essay

On January 1, Jackson acquired common stock of Williams Company. At the time of acquisition, the book value and the market value of Williams' net assets were $100 million. During the current year, Williams earned $30 million and declared dividends of $3 million.
Indicate the amount shown for Investment in Williams on Jackson's balance sheet on December 31 and the amount of income Jackson would report for the year related to its investment under the assumption that Jackson did the following:
a. Paid $10 million for a 10-percent interest in Williams and classifies the investment as a trading security. The market value of Williams on December 31 was $120 million
b. Paid $40 million for a 35-percent interest in Williams and classifies the investment as an influential equity security.