The beginning balance sheet of Text Source Co. included an $ 800,000 investment in Parson Stock (20% ownership). During the year, Text Source completed the following investment transactions:

Mar. 3 Purchased 6,000 shares at $ 9 per share of Andy Software common stock as a long-term, available-for-sale investment, representing 5% ownership.

May 15 Received a cash dividend of $ 0.40 per share on the Andy investment.

Dec. 15 Received a cash dividend of $ 80,000 from Parson investment.

31 Received Parson’s annual report showing $ 300,000 of net income.

31 Received Andy’s annual report showing $ 200,000 of net income for the year.

31 Parson’s stock fair value at year- end was $ 780,000.

31 Andy’s common stock fair value at year-end was $ 10 per share.

Requirements

1. Journalize the transactions for the year of Text Source.

2. Post transactions to T-accounts to determine the December 31 balances related to the investment and investment income accounts.

3. Prepare Text Source’s partial balance sheet at December 31 from your answers in Requirement 2.