if StockInvestmentTransactions,Equity MethodandAvailable-for-Sale Securities

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

Year 1Jan. 18.Purchased 7,100 shares of Malmo Inc. as an available-for-sale investment at $36 per share, including the brokerage commission.July 22.A cash dividend of $0.60 per share was received on the Malmo stock.Oct. 5.Sold 2,100 shares of Malmo Inc. stock at $41 per share less a brokerage commission of $50.Dec. 18.Received a regular cash dividend of $0.60 per share on Malmo Inc. stock.Dec. 31Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $34 per share.

Use the valuation allowance for available-for-sale investments account in making the adjustment.Year 2Jan. 25.Purchased an influential interest in Helsi Co. for $770,000 by purchasing 80,000 shares directly from the

estate of the founder of Helsi. There are 200,000 shares of Helsi Co. stock outstanding.July 16.Received a cash dividend of $0.70 per share on Malmo Inc. stock.Dec. 16.Received a cash dividend of $0.70 per share plus an extra dividend of $0.10 per share on Malmo Inc. stock.Dec. 31Received $23,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $95,000 in Year 2.

Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co.Dec. 31Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $40 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $34 to $40 per share.

Required:

1.Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places.