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statements PR 15-3A Stock investment transactions, equity method and available-fo securities Forte Inc. produces and sells theater set designs and costumes. The erations on January

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statements PR 15-3A Stock investment transactions, equity method and available-fo securities Forte Inc. produces and sells theater set designs and costumes. The erations on January 1, Year 1. The following transactions relate to secupany Forte Inc., which has a fiscal year ending on December 31: el Year 1 Jan. 22. Purchased 22,000 shares of Sankal Inc. as an available-for-sale Mar. 8. Received a cash dividend of $0.22 per share on Sankal Inc. stock. security at $18 per share, including the brokerage commission. Sept. 8. A cash dividend of S0.25 per share was received on the Sankal stock. Oct. 17. Sold 3,000 shares of Sankal Inc. stock at $16 per share less a brokerage Dec. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to commission of $75. fair value of $25 per share. Use the valuation allowance for available-for-sal investments account in making the adjustment. Year Jan. 10. Purchased an influential interest in Imboden Inc. for $720,000 by purchasing 96,000 shares directly from the estate of the founder of Imboden Inc. There are 300,000 shares of Imboden Inc. stock outstanding. Mar. 10. Received a cash dividend of $0.30 per share on Sankal Inc. stock. Sept.12. Received a cash dividend of $0,25 per share plus an extra dividend of $005 pe Dec. 31. Received $57,600 of cash dividends on Imboden Inc. stock. Imboden Inc. share on Sankal Inc. stock reported net income of $450,000 in Year 2. Forte Inc. uses the equity met accounting for its investment in Imboden Inc. od of 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to fair value of $22 per share. Use the valuation allowance for available-for-saie investments account in making the adjustment for the decrease in fair from $25 to $22 per share. 757 Investments and Fair Value Accounting Chapter 15 Instructions 1. Journalize the entries to record these transactions. e investment-related asset and stockholders' equity balance sheet presenta- Forte Inc. on December 31, Year 2, assuming that the Retained Earnings bal- 2. Prepare the ion for ance on December 31, Year 2, is $389,000. OBJ.2,3,4

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