Rose Company had no short-term investments prior to this year. It had the following transactions this year involving short-term stock investments with insignificant influence.
Apr. 16 Purchased 3,500 shares of Gem Co. stock at $24 per share.
July 7 Purchased 2,000 shares of PepsiCo stock at $49 per share.
20 Purchased 1,000 shares of Xerox stock at $16 per share.
Aug. 15 Received a $1.00 per share cash dividend on the Gem Co. stock.
28 Sold 2,000 shares of Gem Co. stock at $30 per share.
Oct. 1 Received a $2.50 per share cash dividend on the PepsiCo shares.
Dec. 15 Received a $1.00 per share cash dividend on the remaining Gem Co. shares.
31 Received a $1.50 per share cash dividend on the PepsiCo shares.

Required

1. Prepare journal entries to record the preceding transactions and events.

2. Prepare a table to compare the year-end cost and fair values of Rose’s short-term stock investments. The year-end fair values per share are Gem Co., $26; PepsiCo, $46; and Xerox, $13.

3. Prepare an adjusting entry to record the year-end fair value adjustment for the portfolio of short-term stock investments.

4. Prepare the current asset section of the balance sheet for the fair value adjustment for Rose’s shortterminvestments.

5. Identify the dollar increase or decrease from Rose’s short-term stock investments on (a) its income statement for this year and (b) the equity section of its balance sheet at this year-end.