Problem 12-7 (Algo)
Problem 12-7 (Algo) Various transactions related to equity investments: fair value through net income [LO125] The following selected transactions relate to investment activities of Omamental insulation Corporation during 2021 . The company buys equity securities as noncurrent investments. None of Omamental's investments are large enough to exert significant infuence on the investee Ornamental's fiscal year ends on December 31. No investments were held by Omamental on December 31,2020 . Mer. 31 Acquired Oistribution Transformers Corporation comon stock for 5470,000. Sep. 1 Acquired $1,005,000 of Aaerican Instruments' conson stock. Sep. 30 Recelved a $14, 10e dividend on the Olstribution Transformers comen stock. oct, 2 Sold the o1stribution Transformers common stock for $502,009. Nov. i Purchased $1,470, e0e of M80 Corporation comon stock. Dec. 31 Recorded any necessary adjusting entry(s) relating to the Investwents. The market prices of the investinents arei Required: 1. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting enties necessary at year. end 2. Indicate any amounts that Omamental insulation would ieport in its 2021 income statement, 2021 statement of comprehensive hicome, and 1231/2021 balance sheet as a result of these investments. Include fotals for net income, comprehensive incame, and retained eacmings as a result of these investments. Journal entry worksheet Record the acquisition of Distribution Transformers Corporation common stock for $470,000 Note: Enter debits before credits. Journal entry worksheet Record the acquisition of $1,005,000 of American Instruments' common stock. Note: Enter debits before credits. Journal entry worksheet Record the entry for dividend received on the Distribution Transformers common stock. Note: Enter debits before credits. Journal entry worksheet Record the entry to adjust to fair value on the date of sale of the Distribution Transformers common stock. Note: Enter debits before credits. Journal entry worksheet Record the entry for sale Distribution Transformers common stock for $502,000. Note: Enter debits before credits. Journal entry worksheet 7 Record the acquisition of $1,470,000 of M\&D Corporation common stock. Note: Enter debits before credits. Journal entry worksheet Record the entry to adjust fair value of the investments at year-end. Note: Enter debits before credits. Indicate any amounts that Omamental 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
