Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2018. The company buys equity securities as investments. None of Ornamentals investments

The following selected transactions relate to investment activities of Ornamental Insulation Corporation during 2018. The company buys equity securities as investments. None of Ornamentals investments are large enough to exert significant influence on the investee. Ornamentals fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2017.

Mar. 31 Acquired Distribution Transformers Corporation common stock for $520,000.
Sep. 1 Acquired $1,080,000 of American Instruments' common stock.
Sep. 30 Received a $18,200 dividend on the Distribution Transformers common stock.
Oct. 2 Sold the Distribution Transformers common stock for $557,000.
Nov. 1 Purchased $1,560,000 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:

American Instruments common stock $ 1,018,000
M&D Corporation common stock $ 1,640,000

Required: 1. Prepare the appropriate journal entry for each transaction or event during 2018, as well as any adjusting entries necessary at year end. 2. Indicate any amounts that Ornamental Insulation would report in its 2018 income statement, 2018 statement of comprehensive income, and 12/31/2018 balance sheet as a result of these investments.

I'm trying to find the amounts for other comprehensive income and comprehensive income

image text in transcribed

image text in transcribed

Date General Journal Debit Credit March 31, 2018 Investment in Distribution Transformers stock 520,000 Cash 520,000 2 September 01, 201 Investment in American Instruments stock 1,080,000 Cash 1,080,000 3 September 30, 201 Cash 18,200 Dividend revenue 18,200 4 October 02, 2018Fair value adjustment 37,000 Unrealized holding gain-NI 37,000 October 02, 2018Cash 557,000 520,000 37,000 Investment in Distribution Transformers stock Fair value adjustment 6 November 01, 2018 Investment in M&D Corporation stock 1,560,000 Cash 1,560,000 7 December 31, 2018 Fair value adjustment 18,000 Unrealized holding gain-NI 18,000 Income statement Dividend revenue Unrealized holding gain on investments sold that occurred prior to sale Unrealized holding gain on investments held Net income $ 18,200 37,000 18,000 $ 73,200 Statement of comprehensive income $ 73,200 Net income Other comprehensive income Comprehensive income Balance sheet: Assets Current Assets 2,640,000 Equity investments Add: Fair value adjustment 18,000 2,658.000 Shareholders' Equity Retained earnings $ 73,200

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Data Analysis And Sampling Simplified A Practical Guide For Internal Auditors

Authors: Donald A. Dickie PhD

1st Edition

1634540611, 978-1634540612

More Books

Students also viewed these Accounting questions

Question

Explain the importance of nonverbal messages.

Answered: 1 week ago

Question

Describe the advantages of effective listening.

Answered: 1 week ago

Question

Prepare an employment application.

Answered: 1 week ago