Georgia Exchange Company completed the following long-term investment transactions during 2012:

At year-end the fair value of the Sydney stock is $30,900. The fair value of the Portland stock is $653,000.

Requirements
1. For which investment is fair value used in the accounting? Why is fair value used for one investment and not the other?
2. Show what Georgia would report on its year-end balance sheet, income statement, and statement of other comprehensive income for these investment transactions. It is helpful to use a T-account for the Long-Term Investment in Portland Stock account. Ignore incometax.

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2012 May 12 Jul 9 Sep 16 Oct 30 Dec 31 Purchased 21,000 shares, which make up 45% of the common stock of Portland Corporation at total cost of $340,000. Received annual cash dividend of $1.26 per share on the Portland investment. Purchased 1,100 shares of Sydney, Inc., common stock as an available-for-sale investment, paying $41.75 per share. Received cash dividend of $0.32 per share on the Sydney investment. Received annual report from Portland Corporation. Net income for the year was $500,000.