II. Stock Investments. During 2016, Stockman Company began investing in the common stock of other companies. Journalize the following activities using the appropriate account titles. For any accounts that would affect the income statement, indicate (I/S) next to the account title.

1. In January, Stockman purchased 4,000 shares of the outstanding stock of Edgar Company (this represented a 40% investment in Edgar Company) at a price of $18 per share.

2. In March, Stockman purchased 2,000 shares of the outstanding stock of Turner Company for $20 per share. This investment was classified as a Trading investment.

3. In April, Edgar Company declared and paid a total cash dividend of $30,000 to its owners.

4. In May, Turner Company paid a $1 per share dividend to its owners.

5. On December 31, each of these companies reported net income to their owners in the following amounts:

Edgar, $80,000 net income

Turner, $100,000 net income

6. At December 31, the following per share amounts were reported for each of Stockmans investments:

Edgar Company $25 per share

Turner Company $18 per share

7. What is the total effect (note amount and direction) on net income for the above transactions?