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 Transforners Corporation common stock for $560,000. Sep. 1 Acquired $1,140,000 of Anerican Instruments' common stock. Sep. 30 Received a $16,800 dividend on the Distribution Transformers connon stock. Oct. 2 Sold the Distribution Transforners comnon stock for $601,000. Nov. 1 Purchased $1,560,000 of yaD Corporation comnon stock. Dec. 31 Recorded any necessary adjusting entryts) relating to the investments. The market prices of the investmenta ares $1,074,000 $1,637,000 American Instrunents conmon stock MAD Corporation connon stock 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.
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 Transforners Corporation common stock for $560,000. Sep. 1 Acquired $1,140,000 of Anerican Instruments' common stock. Sep. 30 Received a $16,800 dividend on the Distribution Transformers connon stock. Oct. 2 Sold the Distribution Transforners comnon stock for $601,000. Nov. 1 Purchased $1,560,000 of yaD Corporation comnon stock. Dec. 31 Recorded any necessary adjusting entryts) relating to the investments. The market prices of the investmenta ares $1,074,000 $1,637,000 American Instrunents conmon stock MAD Corporation connon stock 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.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 23E
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Transcribed Image Text: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 Transforners Corporation common stock for $560,000.
Sep. 1 Acquired $1,140,000 of American Instruments' common stock.
Sep. 30 Received a $16, 800 dividend on the Distribution Transformers common stock.
Oct. 2 Sold the Distribution Transformers common stock for $601,000.
Nov. 1 Purchased $1,560,000 of yaD Corporation common stock.
Dec. 31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are:
$1,074,000
$1,637,000
American Instruments common stock
MAD Corporation comnon stock
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.
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