Capollo€™s long-term available-for-sale portfolio at December 31, 2010, consists of the following.

Capollo enters into the following long-term investment transactions during year 2011.
Jan. 13 Sold 4,250 shares of Company S stock for $144,500 less a brokerage fee of $2,390.
Mar. 24 Purchased 31,000 shares of Company U common stock for $565,750 plus a brokerage fee of $9,900. The shares represent a 62% ownership interest in Company U.
Apr. 5 Purchased 85,000 shares of Company V common stock for $267,750 plus a brokerage fee of $4,500. The shares represent a 10% ownership in Company V.
Sept. 2 Sold 22,000 shares of Company T common stock for $313,500 less a brokerage fee of $5,400.
Sept. 27 Purchased 5,000 shares of Company W common stock for $101,000 plus a brokerage fee of $2,100. The shares represent a 25% ownership interest in Company W.
Oct. 30 Purchased 10,000 shares of Company X common stock for $97,500 plus a brokerage fee of $2,340. The shares represent a 13% ownership interest in Company X.
The fair values of its investments at December 31, 2011, are: R, $1,136,250; S, $420,750; U, $545,600; V, $269,875; W, $109,375; and X, $91,250.

Required
1. Determine the amount Capollo should report on its December 31, 2011, balance sheet for its long-term investments in available-for-sale securities.
2. Prepare any necessary December 31, 2011, adjusting entry to record the fair value adjustment of the long-term investments in available-for-sale securities.
3. What amount of gains or losses on transactions relating to long-term investments in available-for-sale securities should Capollo report on its December 31, 2011, incomestatement?

Transcribed Image Text:

Available-for Sale Securities Cost Fair Value 45.000 shares of Company R common stock $1,118,250 $1.198,125 586,500 303,600 616,760 294.470