Question

Q1 Table Tools References Mailings Review View Help Grammarly Design Layout O Search 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 $490,000. Sep. 1 Acquired $1,035,000 of American Instruments' common stock. Sep 30 Received a $17,150 dividend on the Distribution Transformers common stock. Oct. 2 Sold the Distribution Transformers common stock for $524,000. Nov. 1 Purchased $1,500,000 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 S 976,000 $1,570,000 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. Income statement: Net Income Statement of comprehensive income: Other comprehensive income Comprehensive income Balance sheet: Assets Current Assets Noncurrent Assets Shareholders' Equity o 9 @ @

Answer 1

Jouonal entóes Account PHe ę cxplorafion Date +8व0 Investment Pn dPstofbcelfon toarfoomes u90,000 MOT31 Coopoalfon Alc DO TO Cash AIC 490.000 CTD 0rd shas aqued Pn DTCOOPOa) seps 1,035 000 Investment in Ameofau nstocment AICOO TO Cash AlC 1,035,000 CTD Good bondo agcofed Pn AL) Sep30 Cash Alc DO (aD.000x67 x6/12) 17150 4,600 17,150 TO PnVestaent revenuealc ORend (TD DEOod dluidad eeived fn Orfnstmul 524,000 oct2 Cash Alc 06 490000 TD Pnvestment in OTAIC TO Gofn on saleo Pnuestment Ac (10 Cood Sade of DT frnCstmaat al gon) 34,000 Nov2 Investmat fn MED Cooporalfon AlCDO 1, SDO,E 1500000 TO Cah Alc CTD ecod. Shares acaured in MEDpafe DEC3) Investinerevenee deceivable Alcor TO AvestmetaeveAlC Cli035.000 x 10% y /12) (TO DECood accaed Pnerestfoo 4 months on tho imestmet n AI bond) 34,S00 34,500 Fafo valeso Adcastmet AK DO TO neturaea0ed hodng grnsE boses CTD TECOod unaor? zed gafn on fnestment) 11000 Dec31 11,000 Ale (41035.000+91500o)-($976,000+31700) 2. Income statement S1650 Investment erenve (4 17,50 +$34500) Gofn on SeDe or Povestmats Statement d- Composhensie ncome holdfng gafns 34,000 Baeance sheet Cerosene ASsers: Investment devence ecehrable Sererof Hes avallable foo sale ($l035.000+15D0,000) 25350o (+), Fafo vaee ad fustmeet Sharohoolbers caulty: Net-uneal P20d ho lotrng gafns 34,500 1:00 2546000 11,000