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

2.) Prepare the current asset section of the balance sheet for the fair value adjustment for Roses short-term investments.

3.) Identify the dollar increase or decrease from Roses 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.

Required Information [The following information applles to the questlons displayed below.] Rose Company had no short-term Investments prlor to this year. It had the following transactions this year Involving shortterm stock Investments with Insignificant Influence. April 16 Purchased 3,500 shares of Gem Company stock at $24 per share. July 7 Purchased 2,000 shares of Pepsico stock at $49 per share. July 20 Purchased 1,000 shares of Xerox stock at $16 per share. August 15 Received a $1.00 per share cash dividend on the Gem company stock. August 28 sold 2,000 shares of Gem Company stock at $30 per share. october 1 Received a $2.50 per share cash dividend on the Pepsico shares. December 15 Received a $1.00 per share cash dividend on the remaining Gem company shares. December 31 Received a $1.50 per share cash dividend on the Pepsico shares. The year-end falr values per share are Gem Company, $26; PepsiCo, $46; and Xerox, $13. \begin{tabular}{|c|c|c|c|c|} \hline \multicolumn{1}{|c|}{ No } & Date & General Journal & Debit & Credit \\ \hline 1 & December 31 & No Transaction Recorded & & \\ \hline & & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline Current Assets \\ \hline Stock investments (as cost) & \\ \hline Fair value adjustment-Stock & \\ \hline Stock investments (at fair value) & \\ \hline \end{tabular}