(a) Use the financial statement effects template to record the following four transactions involving investments in marketable securities classified as trading. Please explain answers.

1. Purchased 12,000 common shares of Liu, Inc., at $12 cash per share.

2. Received a cash dividend of $1.10 per common share from Liu.

3. Year-end market price of Liu common stock is $11.25 per share.

4. Sold all 12,000 common shares of Liu for $133,800.

Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
(1)
(2)
(3)
(4)

Income Statement
Revenue	-	Expenses	=	Net Income
1.
2.
3.
4.

Using the same transaction information as above, complete the financial statement effects template assuming the investments in marketable securities are classified as available-for-sale.

Balance Sheet
Transaction	Cash Asset	+	Noncash Assets	=	Liabilities	+	Contributed Capital	+	Earned Capital
(1)
(2)
(3)
(4)

Income Statement
Revenue	-	Expenses	=	Net Income
1.
2.
3.
4.