During the current year, Big Band Corporation has the following transactions related to investments in stock-- note, all purchases of common stock represent purchases of less than 20% of the outstandng shares.

1. Purchased 8,000 shares of Lennon common stock for $24 per share cash.

2. Purchased 4,000 shares of Harrison common stock for $17 per share plus $4,000 broker's fees.

3. Sold 5,000 shares of Lennon common stock for $26 per share less $1,200 broker's fees.

4. Sold 3,000 shares of Harriosn common stock for $15 per share less $800 broker's fees.

5. Received a $.50 per share cash dividend on the Lennon common stock.

6. At the end of the year, the market value of the investments were Lennon common stock $28 per share and Harrison common stock $14 per share.

REQUIRED:

A. Prepare the journal entries necessary for the current year to account for the stock investment transactions of Big Band Corporation assuming the investments had been purchased as trading securities. Then post the entries to the attached set of T-accounts. You may want to post your entries through transaction #5 and balance before journalizing and posting transaction #6.

B. Indiciate the accounts and their balances that would appear on Big Band's financial statements at the end of the current year:

Income Statement: Balance Sheet:

C. Indicate the accounts and their balances that would appear on Big Band's financial statements at the end of the year assuming instead that the investments had been purchased as available for sale securities.

Income Statement: Balance Sheet: