8. 
As a long-term investment at the beginning of the 2021 fiscal year, Florists International purchased 30% of Nursery Supplies Inc.'s 8 million shares of capital stock for $56 million. The fair value and book value of the shares were the same at that time. The company realizes that this investment typically would be accounted for under the equity method, but instead chooses to measure the investment at fair value. During the year, Nursery Supplies reported net income of $40 million and distributed cash dividends of $1.25 per share. At the end of the year, the fair value of the shares is $52 million. Required: 1. How would this investment be classified on Florists' balance sheet? 2. Prepare all appropriate journal entries related to the investment during 2021, under the fair value option, and in a manner similar to what Florists would use for investments in equity securities for which it does not have significant influence. X Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2021, under the fair value option, and in a manner similar to what Florists would use for investments in equity securities for which it does not have significant influence. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10).) Show less A No General Journal Debit Credit Transaction 1 Investment in equity affiliate Cash 56 2 Cash Investment in equity affiliate X 3 Loss on investment (unrealized, NI) Fair value adjustment Required 1 1 2 3 56 1 X 2X 1 x 2 X Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2021, under the fair value option, and in a manner similar to what Florists would use for investments in equity securities for which it does not have significant influence. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10).) Show less A View transaction list Journal entry worksheet Record the dividends. Note: Enter debits before credits. Transaction Debit 2 Cash Investment in equity affiliate Record entry Clear entry General Journal Credit View general journal Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare all appropriate journal entries related to the investment during 2021, under the fair value option, and in a manner similar to what Florists would use for investments in equity securities for which it does not have significant influence. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions, (i.e., 10,000,000 should be entered as 10).) Show less A View transaction list Journal entry worksheet Record any adjusting entry needed at year-end for the change in fair value. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 3 Loss on investment (unrealized, NI) Fair value adjustment 2 Record entry Clear entry View general journal
