At December $31,2010,$ Westport Manufacturing Co$.$ owned the following investments in the capital stock of publicly owned companies $($all classified as available$-$for$-$sale securities$)$: $(45$pts$)$

In $2011,$ Westport engaged in the following two transactions:

Apr: $6$ Sold $100$ shares of its investment in Lamb Computer at a price of $$55$ per share, less a brokerage commission of $$20.$

Apr: $20$ Sold $2,500$ shares of its Dry Foods stock at a price of $$7$ per share, less a brokerage commission of $$20.$

At December $31,2011,$ the market values of these stocks were: Lamb Computer, $$40$ per share; Dry Foods, $$7.$

Instructions:

a$.$ Illustrate the presentation of marketable securities and the unrealized holding gain or loss in Westport's balance sheet at December $31,2010.$ Include a caption indicating the section of the balance sheet in which each of these accounts appears.

b$.$ Prepare journal entries to record the transactions on April $6$ and $.$April $20.$

c$.$ Prior $10$ making a fair value adjustment at the end of $2011,$ determine the unadjusted balance in the Marketable Securities controlling account and the Unrealized Holding Gain $($or Loss$)$ on Investments account. $($Assume that no unrealized gains or losses have been recognized since last year.$)$

d$.$ Prepare a schedule showing the cost and market values of securities owned at the end of $2011.($Use the same format as the schedule illustrated above.$)$

e$.$ Prepare the fair value adjusting entry required at December $31,2011.$

f$.$ Illustrate the presentation of the marketable securities and unrealized holding gain $($or loss$)$ in the balance sheet at December $31.2011.($Follow the same format as in part a$.)$

g$.$ Illustrate the presentation of the net realized gains $($or losses$)$ in the $2011$ income statement. Assume a multiple$-$step income statement and show the caption identifying the section in which this amount would appear.

h$.$ Explain how both the realized and the unrealized gains and losses will affect the company's $2011$ income tax return.