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:

1. Year 1
   Jan. 18.	Purchased 6,300 shares of Malmo Inc. as an available-for-sale investment at $48 per share, including the brokerage commission.
   July 22.	A cash dividend of $0.50 per share was received on the Malmo stock.
   Oct. 5.	Sold 2,800 shares of Malmo Inc. stock at $53 per share less a brokerage commission of $40.
   Dec. 18.	Received a regular cash dividend of $0.50 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 $45 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 $730,000 by purchasing 48,000 shares directly from the estate of the founder of Helsi. There are 120,000 shares of Helsi Co. stock outstanding.
   July 16.	Received a cash dividend of $0.60 per share on Malmo Inc. stock.
   Dec. 16.	Received a cash dividend of $0.60 per share plus an extra dividend of $0.15 per share on Malmo Inc. stock.
   Dec. 31	Received $22,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $90,000 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 $51 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $45 to $51 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.

   Date	Description	Debit	Credit
   Year 1
   Jan. 18.
   July 22.
   Oct. 5.
   Dec. 18.
   Dec. 31
   Year 2
   Jan. 25.
   July 16.
   Dec. 16.
   Dec. 31-Dividends
   Dec. 31-Income
   Dec. 31-Valuation

   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 $533,000.

   Glacier Products, Inc. Balance Sheet (selected items) December 31, Year 2
   Current Assets:
   Investments:
   Stockholders' Equity: