The following selected transactions relate to investment activities of Ornamental Insulation Corporation.

The following selected transactions relate to investment activities of Ornamental Insulation Corporation. The company buys securities, not intending to profit from short-term differences in price and not necessarily to hold debt securities to maturity, but to have them available for sale when circumstances warrant. Ornamental’s fiscal year ends on December 31. No investments were held by Ornamental on December 31, 2015.

 2016   Feb.21 Acquired Distribution Transformers Corporation common shares costing $540,000. Mar.18 Received cash dividends of $7,000 on the investment in Distribution Transformers common shares.

 Sep.1 Acquired $1,320,000 of American Instruments’ 10% bonds at face value. Oct.20 Sold the Distribution Transformers shares for $580,000. Nov.1 Purchased M&D Corporation common shares costing $2,100,000. Dec.31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are:

      American Instruments bonds$1,274,000   M&D Corporation shares$2,174,000     

(Hint: Interest must be accrued for the American Instruments’ bonds.)    

 2017   Jan.20 Sold the M&D Corporation shares for $2,199,000. Mar.1 Received semiannual interest of $66,000 on the investment in American Instruments bonds. Aug.12 Acquired Vast Communication common shares costing $790,000. Sept.1 Received semiannual interest of $66,000 on the investment in American Instruments bonds. Dec.31 Recorded any necessary adjusting entry(s) relating to the investments. The market prices of the investments are:

      Vast Communication shares$810,000   American Instruments bonds$1,254,000 

Indicate any amounts that Ornamental Insulation would report in its 2016 balance sheet and income statement as a result of these investments. (Amounts to be deducted should be indicated with a minus sign.)

3.Prepare the appropriate journal entry for each transaction or event during 2017. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)

4.Indicate any amounts that Ornamental Insulation would report in its 2017 balance sheet and income statement as a result of these investments. (Amounts to be deducted should be indicated with a minus sign.)

Order the answer to view it

Place this order or similar order and get an amazing discount. USE Discount code “GET20” for 20% discount

Posted in Uncategorized