Question

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 $540,000.
Sep.		1		Acquired $1,110,000 of American Instruments' common stock.
Sep.		30		Received a $16,200 dividend on the Distribution Transformers common stock.
Oct.		2		Sold the Distribution Transformers common stock for $579,000.
Nov.		1		Purchased $1,560,000 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	$	1,046,000
M&D Corporation common stock	$	1,635,000

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.

$ 16,200 50,000 66,200 $ $ Income statement: Dividend revenue Gain on investments Net income Statement of comprehensive income: Net income Other comprehensive income Comprehensive income Balance sheet: Assets Current Assets Cash 66,200 0 66,200 $ $ 595,200 X 0 Noncurrent Assets Investments in equity securities Add: Fair value adjustment Shareholders' Equity Retained earnings $ 2,670,000 11,000 $ 2,681,000 66,200

Don't know what to put in the current assets.

Answer 1

Under Current Assets
Only Cash will be recorded, since beginning balance of cash is not given, only change in cash can be recorded.

Acquired Distribution Transformers Corporation common stock	$       -540,000
Acquired American Instruments' common stock.	$    -1,110,000
Received dividend on the Distribution Transformers common stock.	$           16,200
Sold the Distribution Transformers common stock	$         579,000
Purchased M&D Corporation common stock.	$    -1,560,000
Net Change in cash from these transactions	$    -2,614,800

Other Current Asset can be Dividend Receivable which is 0