BE 131

On January 1, 2008, Owen Company purchased 5,000 shares of Jen Company stock for $300,000. Owens investment represents 10 percent of the total outstanding shares of Jen. During 2008, Jen paid total dividends of $100,000 and reported net income of $250,000. What revenue does Owen report related to this investment and what is the amount to be reported as an investment in Jen stock at December 31?

BE 132

At January 1, 2008, the trading securities portfolio held by the Darin Corporation consisted of the following investments:

2,000 shares of Stitch common stock purchased for $42 per share.

1,500 shares of Marvel common stock purchased for $50 per share.

At December 31, 2008, the fair values per share were Stitch $46 and Marvel $54.

Instructions

(a) Prepare a schedule showing the cost and fair value of the portfolio at December 31, 2008.

(b) Prepare the adjusting entry to report the portfolio at fair value at December 31, 2008.