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 $460,000. Sep. 1 Acquired $990,000 of American Instruments' common stock. Sep. 30 Received a $13,800 dividend on the Distribution Transformers common stock. Oct. 2 Sold the Distribution Transformers common stock for $491,000. Nov. 1 Purchased $1,440,000 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 $ 934,000 M&D Corporation common stock $ 1,526,000 Required: 1. compute 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 Compute the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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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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 $460,000.
Sep.	1	Acquired $990,000 of American Instruments' common stock.
Sep.	30	Received a $13,800 dividend on the Distribution Transformers common stock.
Oct.	2	Sold the Distribution Transformers common stock for $491,000.
Nov.	1	Purchased $1,440,000 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	$	934,000
M&D Corporation common stock	$	1,526,000

Required:
1. compute 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

Compute the appropriate journal entry for each transaction or event during 2021, as well as any adjusting entries necessary at year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

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