The following information relates to the activity in the short-term investment account of Lido International, which held no short-term investments as of January 1. (1) January 28 (2) February 18 (3) March 15 (4) April 29 (5) May 18 (6) June 1 (7) June 30 Purchased ten shares of Able Co. stock at $14 per share. Purchased twenty shares of Baker Co. stock at $26 per share. Received dividends from Able Co. of $1 per share. Sold five shares of Able Co. for $15 per share Received dividends from Baker Co. of $2 per share. Sold five shares of Baker Co. for $22 per share. Market value of Able shares is $17 per share. ^ Market value of Baker shares is $20 per share. \V required:

a. Prepare journal entries for each transaction excluding the June 30 adjusting entry. Use the asset account “Short-Term Investments” and assume that dividends were declared and paid on the same day.

b. Prepare the June 30 adjusting entry, and describe the effect on reported income, assuming: (1) Able and Baker shares are both considered trading securities, (2) Able is considered a trading security, and Baker is considered an available-for-sale security, (3) Able is consid¬ ered an available-for-sale security, and Baker is considered a trading security, and (4) both Able and Baker are considered available-for-sale securities.

c. Which combination in

(b) depicts management as most successful in the current period? Explain.