prepare the investment related asset and stockholders rsquo equity balance sheet dis 554505

2012

Jan. 10.

Purchased 8,000 shares of Lott Inc. as an available-for-sale security at $14 per share, including the brokerage commission.

Mar. 10.

Received the regular cash dividend of $0.12 per share on Lott Inc. stock.

Sept. 9.

Lott Inc. stock was split two for one. The regular cash dividend of $0.06 per share was received on the stock after the stock split.

Oct. 16.

Sold 2,000 shares of Lott Inc. stock at $5 per share, less a brokerage commission of $100.

Dec. 31.

Lott Inc. is classifi ed as an available-for-sale investment and is adjusted to a fair value of $8.50 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.

2013

Jan. 5.

Purchased an infl uential interest in Stage Hand Inc. for $235,000 by purchasing 50,000 shares directly from the estate of the founder of Stage Hand Inc.There are 200,000 shares of Stage Hand Inc. stock outstanding.

Mar. 9.

Received the regular cash divided of $0.07 per share on Lott Inc. stock.

Sept. 10.

Received the regular cash dividend of $0.07 per share plus an extra dividend of $0.03 per share on Lott Inc. stock.

Dec. 31.

Received $21,500 of cash dividends on Stage Hand Inc. stock. Stage Hand Inc. reported net income of $136,000 in 2013. White Way Inc. uses the equity method of accounting for its investment in Stage Hand Inc.

31.

Lott Inc. is classifi ed as an available-for-sale investment and is adjusted to a fair value of $8 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the decrease in fair value from $8.50 to $8.00 per share.