On January 1, 2011, Reduction Products Inc. acquired 1,500 shares of the outstanding common stock of Tupper Corp. for $ 24,000. On that date, Tupper had 10,000 shares of common stock outstanding. On October 1, 2011, Tupper declared and paid a cash dividend of $ 2 per share. On November 13, 2011, Reduction sold 300 shares of Tupper for $ 5,000. Tupper reported 2011 net income of $ 36,000. Tupper’s stock sold for $ 15 per share at December 31, 2011. This is Reduction’s only investment and they plan on remaining invested in Tupper for a number of years.
Required:
1. Prepare Reduction’s journal entries to record the transactions related to its investment in Tupper.
2. Give the title and amount of each item (except cash) on the December 31, 2011, balance sheet related to this investment. Name the balance sheet section in which each item appears.