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 2021. The company buys equity securities as noncurrent Investments. None of

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 $580,000. Sep. 1 Acquired $1,170,000 of American Instruments' common stock. Sep. 30 Received a $17,400 dividend on the Distribution Transformers common stock. oct. 2 sold the Distribution Transformers common stock for $623,000. Nov. 1 Purchased $1,590,000 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 M&D Corporation common stock $1,102,000 $1,670,000 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 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. 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. Income statement: Dividend revenue Gain on investments Net income Statement of comprehensive income: Net income Other comprehensive income Comprehensive income Balance sheet: Noncurrent Assets Assets Investments in equity securities Add: Fair value adjustment Shareholders' Equity Retained earnings S 0 S 0

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Required 1 Journal Entries 1 Mar 31 Acquired Distribution Transformers Corporation common stock for 580000 Mar 31 Investment in Equity Securities Dist... 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

Document Format ( 2 attachments)

PDF file Icon
664212b71a057_986555.pdf

180 KBs PDF File

Word file Icon
664212b71a057_986555.docx

120 KBs Word File

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

Intermediate Accounting

Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas

10th edition

1260481956, 1260310175, 978-1260481952

More Books

Students also viewed these Accounting questions