Williams Corporation acquired the following equity securities during 2012: 200 shares of Southwestern Company capital stock $ 14,600 500 shares of Montgomery Products capital stock 14,500 Williams’s investment in both of these companies is passive and Williams classifies these securities as available-for-sale. During 2012, Southwestern paid a dividend of $ 1.20 per share, and Montgomery paid a dividend of $ 1.80 per share. At December 31, 2012, the Southwestern stock has a market value of $ 75 per share, and the Montgomery stock has a market value of $ 25 per share.
1. Prepare entries for Williams’s journal to record these two investments and the receipt of the dividends.
2. Calculate the market value of Williams’s short-term investment portfolio at December 31, 2012.
3. Prepare the necessary adjusting entry at December 31, 2012.
4. How would these securities be disclosed on the December 31, 2012, balance sheet?