During January 2011, Nash Glass Company purchased the following shares as a long-term investment:

Subsequent to acquisition, the following data were available:

Required:
1. What accounting method should be used for the investment in Q common stock? R preferred stock? Why?
2. Give the journal entries for the company for each year in parallel columns (if none, explain why) for each of the following:
a. Purchase of the investments.
b. Income reported by Q and R Corporations.
c. Dividends received from Q and R Corporations.
d. Market value effects at year-end.
3. For each year, show how the following amounts should be reported on the financial statements:
a. Long-term investment.
b. Stockholders' equity'net unrealized gains and losses.
c.Revenues.

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Number of Shares Cost per Stock Shares Outstanding Purchased Share Q Corporation Common (no-par) R Corporation Preferred, nonvoting (par $10) 95,000 25,000 11,000 9 11,300 26 2011 2012 Net income reported at December 31 Q Corporation R Corporation $31.000 36,000 S41,000 55,000 Dividends declared and paid per share during the year Q Corporation common stock R Corporation preferred stock $ 0.70 0.74 0.75 0.75 Market value per share at December 31 Q Corporation common stock R Corporation preferred stock 8.00 S8.00 25.00 26.00