Roman Products, Inc., is a wholesaler of men’s hair products.

Roman Products, Inc., is a wholesaler of men’s hair products. The company began operations on January 1, 2010. The following transactions relate to securities acquired by Roman Products, Inc., which has a fiscal year ending on December 31:
2010
Jan. 3. Purchased 3,000 shares of Whalen Inc. as an available-for-sale investment at $46 per share, including the brokerage commission.
July 6. Split Whalen Inc. stock 2 for 1 and received the regular cash dividend of $0.60 per share on the Whalen Inc. stock after the split.
Oct. 14. Sold 900 shares of Whalen Inc. stock at $25 per share, less a brokerage commission of $50.
Dec. 9. Received the regular cash dividend of $0.60 per share.
31. Whalen Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $21 per share. Use the Valuation Allowance for Available for Sale Investments account in making the adjustment.
2011
Jan. 5. Purchased an influential interest in Tasmania Co. for $620,000 by purchasing 60,000 shares directly from the estate of the founder of Tasmania. There are 150,000 shares of Tasmania Co. stock outstanding.
July 8. Received the regular cash divided of $0.70 per share on Whalen Inc. stock.
Dec. 8. Received the regular cash dividend of $0.70 per share plus an extra dividend of $0.15 per share on Whalen Inc. stock.
31. Received $18,000 of cash dividends on Tasmania Co. stock. Tasmania Co. reported net income of $74,000 in 2011. Roman Products uses the equity method of accounting for its investment in Tasmania Co.
31. Whalen Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $26 per share. Use the Valuation Allowance for Available for Sale Investments account in making the adjustment.
Instructions
1. Journalize the entries to record the preceding transactions.
2. Prepare the investment-related asset and stockholders’ equity balance sheet disclosures for Roman Products, Inc., on December 31, 2011, assuming the Retained Earnings balance on December 31, 2011, is $455,000.

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...
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...

Members

  • Access to 2 Million+ Textbook solutions
  • Ask any question from 24/7 available
    Tutors
$9.99
VIEW SOLUTION

OR

Non-Members

Get help from Accounting Tutors
Ask questions directly from Qualified Online Accounting Tutors .
Best for online homework assistance.