The December 31, 2013, balance sheet of Fire Towing Corporation included Investments-Associated Companies at Equity $15,000,000

Suppose the company completed the following investment transactions during the year:

2014 Mar. 2 Purchased 2,000 common shares as a short-term investment, paying $38.00 per share plus brokerage commission of $900.

5 Purchased additional shares in an associated company at a cost of $1,600,000. Commissions on the purchase were $30,000.

Jul. 21 Received the semiannual cash dividend of $1.50 per share on the short-term investment purchased March 2.

Aug. 17 Received a cash dividend of $160,000 from an associated company.

Oct. 16 Sold 1,100 shares of the short-term investment (purchased on March 2) for $36.00 per share, less brokerage commission of $600.

Nov. 8 Purchased short-term investments for $310,000, plus brokerage commission of $5,000.

17 Received a cash dividend of $280,000 from an associated company.

Dec. 31 Received annual reports from associated companies. Their total net income for the year was $6,900,000. Of this amount, Fire Towing's proportion is 24 percent.

Required

1. Record the transactions in the general journal of Fire Towing Corporation.

2. Post entries to the Equity Investments T-account and determine its balance at December 31, 2014.

3. Assume the beginning balance of Short-Term Investments was cost of $104,000. Post entries to the Short-Term Investments T-account and determine its balance at December 31, 2014.

4. Assuming the market value of the short-term investment portfolio is $425,000 at December 31, 2014, show how Fire Towing Corporation would report short-term investments and investments in associated companies on the ending balance sheet. (No journal entry is required.) Use the following format:

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Cash Short-term investments, at fair value Accounts receivable (net) XxX XxX Total current assets Investments -Associated companies at equity