Problem 12-7 (Algo) Various transactions related to equity investments: fair value through net income [LO12-5) 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 Acquired Distribution Transformers Corporation common stock for $470,000. Sep. 1 Acquired $1,885, eee of American Instruments' common stock. Sep. 30 Received a $14,100 dividend on the Distribution Transformers common stock. 2 Sold the Distribution Transformers common stock for $5e2,eee. 1 Purchased $1,470,of M&D Corporation common stock. Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are: Oct. Nov. American Instruments common stock M&D Corporation common stock $948,888 $1,537,880 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 12/31/2021 balance sheet as a result of these investments. Include totals for net Income, comprehensive Income, and retained earnings as a result of these Investments. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 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 Date General Journal Debit Credit 1 March 31, 2021 470.000 Investment in equity securities Cash 470.000 N 2 September 01, 20 Investment in bonds x 1.005.000 Cash 1.005.000 3 September 30, 20 Cash 14,100 > > Dividend revenue 14.100 4 32,000 October 02, 2021 Fair value adjustment Gain on investments (NI) 32.000 5 502.000 October 02, 2021 Cash Fair value adjustment Investment in equity securities 32.000 Ole 470.000 6 November 01, 202 Investment in equity securities 1.470.000 Cash 1.470.000 7 December 31, 204 Fair value adjustment 10.000 Gain on investments (NI) 10.000 Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. 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. IS os 14,100 42,000 56,100 Is S S IS Income statement: Dividend revenue Gain on investments Net income Statement of comprehensive income: Net income Other comprehensive income Comprehensive income Balance sheet: Assets Noncurrent Assets Gain on investments Add: Fair value adjustment Shareholders' Equity Retained earnings 56,100 0 56,100 XS 2,475,000 x 10.000 S 2,485,000 s 56.100
