On November 1 of Year 1, Drucker Co. acquired the following investments in equity securities measured at FVNI.

Kelly Corporation	1,000	shares of common stock (no-par) at $60 per share
Keefe Corporation	600	shares preferred stock ($10 par) at $20 per share

On December 31, the companys year-end, the quoted market prices were as follows: Kelly Corporation common stock, $52, and Keefe Corporation preferred stock, $24. Following are the data for the following year (Year 2). Mar. 02: Dividends per share, declared and paid: Kelly Corp., $1, and Keefe Corp., $0.50. Oct. 01: Sold 200 shares of Keefe Corporation preferred stock at $25 per share. Dec. 31: Fair values: Kelly common, $46 per share, Keefe preferred, $26 per share. a. Prepare the entry for Drucker Company to record the purchase of the securities. b. Prepare any adjusting entry needed at December 31, Year 1.

c. Indicate the items and amounts that should be reported on the Year 1 income statement of Drucker and its year-end balance sheet. Assume that the investments are classified as current.

d. Prepare the entries required in Year 2 to record dividend revenue, the sale of stock, and the fair value adjustment. Assume that the Fair Value Adjustment account needs to be adjusted for the investment portfolio on December 31, Year 2.

e. Indicate items and amounts that should be reported on the Year 2 income statement and year-end balance sheet.