Below are selected T-accounts for Gauge Company. Required: Complete the following journal entries and answer the following

Question:

Below are selected T-accounts for Gauge Company.

Investments in Affiliates 83,619 12,844 Equity in Affiliate Earnings 1/1 Purchase Share of affiliate net income 12/31 1/

Required:
Complete the following journal entries and answer the following questions:
a. Purchased additional investments in affiliated companies for cash. Prepare the journal entry.
b. Received cash dividends on the investments. Prepare the journal entry.
c. At year-end, the investments in affiliates account had a fair value of $62,000; the affiliate also reported $5,800 in net income for the year. Prepare the adjusting entry.
d. What would be reported on the balance sheet related to the investments in affiliates on December 31?
e. What would be reported on the income statement for theyear?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...