Determine investment income for corporate joint venturers
Sun Corporation is a corporate joint venture that is jointly controlled and operated by five investor venturers, four with 15 percent interests each and one with a 40 percent interest. Each of the five venturers is active in venture management. Land sales and other important venture decisions require the consent of each venturer. All venturers paid $15 per share for their investments on January 1, 2011, and no changes in ownership interests have occurred since that time. During 2012, Sun reported net income of $500,000 and paid dividends of $100,000. The stockholders’ equity of Sun at December 31, 2012, is as follows (in thousands):
|
Sun Corporation Stockholders’ Equity |
|
|
at December 31, 2012 |
|
|
Common stock $10 par, 500,000 shares authorized, |
|
|
issued, and outstanding |
$5,000 |
|
Additional paid in capital |
2,500 |
|
Total paid in capital |
7,500 |
|
Retained earnings |
1,000 |
|
Total stockholders’ equity |
$8,500 |
REQUIRED: Determine the investment income for 2012 and the investment account balance at December 31, 2012, for the 40 percent venturer and for one of the 15 percent venturers.