Journal entries

Joints Referen ces The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys debt securities, notintending to prot from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale in years when circumstances warrant. Ornamental's scal year ends on December 31. No investments were held by Ornamental on December 31, 2020. liar. 31 Acquired 5% Distribution Transformers Corporation bonds costing $10,000 at face value. Sep. 1 Acquired $915,000 of American Instruments' 3% bonds at face value. Sep. 30 Received semiannual interest payment on the Distribution Transformers bonds. Oct. 2 Sold the Distribution Transformer! bonds for $436,000. Nov. 1 Purchased $1,410,000 of DMD Corporation 3! bonds costing at face value. Dec. 31 Recorded any necessary adjusting entryls) relating to the investments. The market prices of the investments are: American Instruments bonds 5 864,000 MED Corporation bonds $1,471,000 (Hint: Interest must be accrued.) Required: 1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year end. For any sales, prepare entries to update the fair-value adjustment, record any reclassication adjustment, and record the sale. 2. Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement of comprehensive income, and 12l31/2021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments. points Referen ces The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2021. The company buys equity securities as noncurrent investments. None of Ornamental's investments are large enough to exert signicant influence on the investee. Ornamental's scal year ends on December 31. No investments were held by Ornamental on December 31. 2020. Mar. 31 Acquired Distribution Transformers Corporation common stock for $500,000. Sep. 1 Acquired $1,050,000 of American Instruments' common stock. Sep. 30 Received a $15,000 dividend on the Distribution Transformers common stock. Oct. 2 Sold the Distribution Transformers common stock for $535,000. Nov. 1 Purchased $1,500,000 of man Corporation common stock. Dec. 31 Recorded any necessary adjusting entry{s) relating to the investments. The market Prices of the investment: are: American Instruments common stock $ 990,000 Han Corporation common stock $1,570,000 Required: 1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year end. 2. Indicate any amounts that Ornamental Insulation would report in its 2021 income statement, 2021 statement of comprehensive income, and 12/31/2021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments. References Northwest Paperboard Company, a paper and allied products manufacturer, was seeking to gain a foothold in Canada. Toward that end, the company bought 40% of the outstanding common shares of Vancouver Timber and Milling, Inc., on January 2, 2021, for $500 million. At the date of purchase. the book value of Vancouver's net assets was $825 million. The book values and fair values for all balance sheet items were the same except for inventory and plant facilities. The fair value exceeded book value by $5 million for the inventory and by $30 million for the plant facilities. The estimated useful life of the plant facilities is 15 years. All inventory acquired was sold during 2021. Vancouver reported net income of $240 million for the year ended December 31, 2021. Vancouver paid a cash dividend of $60 million. Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. What amount should Northwest report as its income from its investment in Vancouver for the year ended December 31, 2021? 3. What amount should Northwest report in its balance sheet as its investment in Vancouver? 4. What should Northwest report in its statement of cash ows regarding its investment in Vancouver