Problem 12-7 (Algo) Various transactions related to equity Investments: fair value through net income (L012-5) 10 points 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 significant influence on the investee. Ornamental's fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2020 Mar. 31 Acred Distribution Transfomers Corporation on stock for $540.000. Sep. 1 Apred $1. 110.000 of America Inau ta' common stock Sep 30 Received a $16.200 divided on the D u tion Tranton stack Oct. 2 Sold the Dirbutin Trom s tock for $57900 Nov. 1 Pached $1.500.000 of MD Corporation can stock Dec. 31 Recorded wyt y during trys relating to the intents. The market prices of the investets are American Instruments common stock HD Corporation C ontock $1.046.000 $1.695.000 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 Omamental Insulation would report in its 2021 income statement, 2021 statement of comprehensive income, and 12/312021 balance sheet as a result of these investments. Include totals for net income, comprehensive income, and retained earnings as a result of these investments X Answer is not complete. Complete this question by entering your answers in the tabs below. Prepare the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year-end. (If no entry is required for a transaction/event, select "No journal entry required in the first account field.) No Credit Date March 31, 2021 General Journal Investment in bonds Debit 540,000 Cash 540,000 1,110,000 September 01, 20 Investment in equity securities Cash 1.110.000 3 16,200 September 30, 20 Cash Dividend revenue 16,200 4 579,000 X October 02, 2021 Cash Investment in equity securities Gain on Investments (NI) 540,000 39,000 1,560,000 October 02, 2021 Investment in bonds Cash 1,560,000 X 64.000 November 01, 202 Fair value adjustment Investment in equily securities 64,000 December 31, 202 Fair value adjustment 11,000 Loss on investments (unrealized, OCI) 11,000 Required 1 Required 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 19000 OS 16200 55,200 55.200 Income statement: Gain on investments Dividend revenue Net income Statement of comprehensive income: Net Income Other comprehensive income Comprehensive income Balance sheet: Assets Current Assets 55,200 x 11,000 X 55,200 X Investments in equity securities 2631,000, Noncurrent Assets Investments in equity Securities Add: Fair value adjustment Shareholders' Equity Comprehensive income $ 2,670,000 11,000 $ 2,681,000 55,200 X
