PR 15-3A Stock investment transactions, equity method and available-for-sale securities ов) 3, 4 Forte Inc. produces and sells theater set designs and costumes. The company began op- erations on...

Extracted text: PR 15-3A Stock investment transactions, equity method and available-for-sale securities ов) 3, 4 Forte Inc. produces and sells theater set designs and costumes. The company began op- erations on January 1, Year 1. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31: cel Year 1 Jan. 22. Purchased 22,000 shares of Sankal Inc. as an available-for-sale security at $18 per share, including the brokerage commission. Mar. 8. Received a cash dividend of $0.22 per share on Sankal Inc. stock. Sept. 8. A cash dividend of $0.25 per share was received on the Sankal stock. Oct. 17. Sold 3,000 shares of Sankal Inc. stock at $16 per share less a brokerage commission of $75. Dec. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $25 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment. Year 2 Jan. 10. Purchased an influential interest in Imboden Inc. for $720,000 by purchasing 96,000 shares directly from the estate of the founder of Imboden Inc. There are 300,000 shares of Imboden Inc. stock outstanding. Mar. 10. Received a cash dividend of $0.30 per share on Sankal Inc. stock. Sept. 12. Received a cash dividend of $0.25 per share plus an extra dividend of $0.05 per share on Sankal Inc. stock. Dec. 31. Received $57,600 of cash dividends on Imboden Inc. stock. Imboden Inc. reported net income of $450,000 in Year 2. Forte Inc. uses the equity method of accounting for its investment in Imboden Inc. 31. Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $22 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the decrease in fair value from $25 to $22 per share. Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, acanned, or duplicated, in whole or in part. WCN 02-200-202 756 Contents Notebook Bookmarks Flashcards IK !