Stock Investment Transactions, Equity Method and Available for Sale Securities Glacier Products Inc is a wholesaler of rock climbing gear The company began operations on January 1, Year 1 The following transactions relate to securities acquired by Glacier Products Inc , which has a fiscal year ending on December 31 Year 1 Jan 18 Purchased 8,500 shares of Malmo Inc as an available for sale investment at $42 per share, including the brokerage commission July 22 A cash dividend of $0 65 per share was received on the Malmo stock Oct 5 Sold 3,800 shares of Malmo Inc stock at $45 per share less a brokerage commission of $50 Dec 18 Received a regular cash dividend of $0 65 per share on Malmo Inc stock Dec 31 Malmo Inc is classified as an available for sale investment and is adjusted to a fair value of $39 per share Use the valuation allowance for available for sale investments account in making the adjustment Year 2 Jan 25 Purchased an influential interest in Helsi Co for $630,000 by purchasing 68,000 shares directly from the estate of the founder of Helsi There are 170,000 shares of Helsi Co stock outstanding July 16 Received a cash dividend of $0 75 per share on Malmo Inc stock Dec 16 Received a cash dividend of $0 75 per share plus an extra dividend of $0 10 per share on Malmo Inc stock Dec 31 Received $19,000 of cash dividends on Helsi Co stock Helsi Co reported net income of $78,000 in Year 2 Glacier Products Inc uses the equity method of accounting for its investment in Helsi Co Dec 31 Malmo Inc is classified as an available for sale investment and is adjusted to a fair value of $46 per share Use the valuation allowance for available for sale investments account in making the adjustment for the increase in fair value from $39 to $46 per share Required 1 Journalize the entries to record the preceding transactions For a compound transaction, if an amount box does not require an entry, leave it blank In your computations, round per share amounts to two decimal places 2 Prepare the investment related asset and stockholders equity balance sheet presentation for Glacier Products Inc on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $460,000

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Posted on Sep 07, 2024

Stock Investment Transactions, Equity Method and Available-for-Sale Securities Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1,

Stock Investment Transactions, Equity Method and Available-for-Sale Securities

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, Year 1. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

Year 1
Jan. 18.	Purchased 8,500 shares of Malmo Inc. as an available-for-sale investment at $42 per share, including the brokerage commission.
July 22.	A cash dividend of $0.65 per share was received on the Malmo stock.
Oct. 5.	Sold 3,800 shares of Malmo Inc. stock at $45 per share less a brokerage commission of $50.
Dec. 18.	Received a regular cash dividend of $0.65 per share on Malmo Inc. stock.
Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $39 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.
Year 2
Jan. 25.	Purchased an influential interest in Helsi Co. for $630,000 by purchasing 68,000 shares directly from the estate of the founder of Helsi. There are 170,000 shares of Helsi Co. stock outstanding.
July 16.	Received a cash dividend of $0.75 per share on Malmo Inc. stock.
Dec. 16.	Received a cash dividend of $0.75 per share plus an extra dividend of $0.10 per share on Malmo Inc. stock.
Dec. 31	Received $19,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $78,000 in Year 2. Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co.
Dec. 31	Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $46 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $39 to $46 per share.

Required:

1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank. In your computations, round per share amounts to two decimal places.

2. Prepare the investment-related asset and stockholders equity balance sheet presentation for Glacier Products Inc. on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $460,000.