On January 1, 2014, Thor Corp.bought 30,000 shares of the available 100,000 common shares...

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On January 1, 2014, Thor Corp.bought 30,000 shares of the available 100,000 common shares of LokiInc., a publicly traded firm. This acquisition provided Thor withsignificant influence. Thor paid $700,000 cash for the investment.At the time of the acquisition, Loki reported assets of $2,500,000and liabilities of $1,200,000. Asset values reflected fair marketvalue, except for capital assets that had a net book value of$500,000 and a fair market value of $730,000. These assets had aremaining useful life of five years. For 2014 Loki reported netincome of $400,000 and paid total cash dividends of $100,000.
On May 16, 2018, Thor sold 15,000of its shares in Loki for $425,000. Thor has no immediate plans tosell its remaining investment in Iceberg.
Loki is actively traded, and stockprice information follows:
o January 1, 2014 = $23
o December 31, 2014 = $25
o January 1, 2018 = $26
Required
1. Assuming Thor is using ASPE, did the initial investmentinclude a payment for goodwill? Provide support for your answer.
2. At the end of 2014, what would appear on the income statementand balance sheet of Thor in connection with its investment inLoki? Show supporting calculations.
3. Provide the entry to account for Thor’s sale of the shares inMay 2018. How should Thor account for its remaining investment inLoki?

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In: AccountingOn January 1, 2014, Thor Corp.bought 30,000 shares of the available 100,000 common shares of...On January 1, 2014, Thor Corp.bought 30,000 shares of the available 100,000 common shares of LokiInc., a publicly traded firm. This acquisition provided Thor withsignificant influence. Thor paid $700,000 cash for the investment.At the time of the acquisition, Loki reported assets of $2,500,000and liabilities of $1,200,000. Asset values reflected fair marketvalue, except for capital assets that had a net book value of$500,000 and a fair market value of $730,000. These assets had aremaining useful life of five years. For 2014 Loki reported netincome of $400,000 and paid total cash dividends of $100,000.On May 16, 2018, Thor sold 15,000of its shares in Loki for $425,000. Thor has no immediate plans tosell its remaining investment in Iceberg.Loki is actively traded, and stockprice information follows:o January 1, 2014 = $23o December 31, 2014 = $25o January 1, 2018 = $26Required1. Assuming Thor is using ASPE, did the initial investmentinclude a payment for goodwill? Provide support for your answer.2. At the end of 2014, what would appear on the income statementand balance sheet of Thor in connection with its investment inLoki? Show supporting calculations. 3. Provide the entry to account for Thor’s sale of the shares inMay 2018. How should Thor account for its remaining investment inLoki?