Glacier Products Inc. is a wholesaler of rock climbing gear. The company began o

Question

Glacier Products Inc. is a wholesaler of rock climbing gear. The company began operations on January 1, 2016. The following transactions relate to securities acquired by Glacier Products Inc., which has a fiscal year ending on December 31:

Record these transactions on page 10:

2016

Record these transactions on page 11:

2017

Amount Descriptions

Journalize the entries to record these transactions. Be sure to enter the year as part of the date for the first entry on each page. Refer to the information given and the Chart of Accounts provided for the exact wording of the answer choices for text entries.

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JOURNAL

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Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Glacier Products Inc. on December 31, 2017, assuming the Retained Earnings balance on December 31, 2017, is $700,000. Refer to the Chart of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. For those boxes in which you must enter subtractive or negative numbers use a minus sign.

GLACIER PRODUCTS, INC.

Balance Sheet (selected items)

December 31, 2017

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Current assets:

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Investments:

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Stockholders’ equity:

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2016

Jan. 18 Purchased 9,000 shares of Malmo Inc. as an available-for-sale investment at $40 per share, including the brokerage commission. July 22 A cash dividend of $3.00 per share was received on the Malmo stock. Oct. 5 Sold 500 shares of Malmo Inc. stock at $58.00 per share, less a brokerage commission of $100. Dec. 18 Received a regular cash dividend of $3.00 per share on Malmo Inc. stock. 31 Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $36.00 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.

Explanation / Answer

Journal

Balance sheet (selected items)

Date Account Name Debit Credit 2016 Jan 18 Investments-Malmo Inc. $360000 Cash $360000 Jul 22 Cash 27000 Dividend revenue 27000 Oct 5 Cash[ (500 x $58)-$100] 28900 Investments-Malmo Inc. (500 x $40) 20000 Gain on sale of investments 8900 Dec 18 Cash (3 x 8500) 25500 Dividend revenue 25500 Dec 31 Valuation Allowance for Available-for-Sale Investments 34000 Investments-Malmo Inc (4 x 8500) 34000 2017 Jan 25 Investment in Helsi Co. Stock 800000 Cash 800000 Jul 16 Cash ($3 x 8500) 25500 Dividend revenue 25500 Dec 16 Cash ($3.20 x 8500) 27200 Dividend revenue 27200 Dec 31 Investment in Helsi Co. Stock 170000 Income of Helsi Co. 170000 Cash 38000 Investment in Helsi Co. Stock 38000 Dec 31 Investments-Malmo Inc ($8 x 8500) 68000 Valuation Allowance for Available-for-Sale Investments 68000

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