Forte Inc. produces and sells theater set designs and costumes.The company began operations on January 1, Year 1. The followingtransactions relate to securities acquired by Forte Inc., which hasa fiscal year ending on December 31:

Year 1
Jan.	22	Purchased 23,600 shares of Sankal Inc. as an available-for-salesecurity at $18 per share, including the brokerage commission.
Mar.	8	Received a cash dividend of $0.21 per share on Sankal Inc.stock.
Sep.	8	A cash dividend of $0.24 per share was received on the Sankalstock.
Oct.	17	Sold 4,700 shares of Sankal Inc. stock at $15 per share less abrokerage commission of $60.
Dec.	31	Sankal Inc. is classified as an available-for-sale investmentand is adjusted to a fair value of $26 per share. Use the valuationallowance for available-for-sale investments account in making theadjustment.

Record these transactions on page 11:

Year 2
Jan.	10	Purchased an influential interest in Imboden Inc. for$1,287,000 by purchasing 165,000 shares directly from the estate ofthe founder of Imboden Inc. There are 500,000 shares of ImbodenInc. stock outstanding.
Mar.	10	Received a cash dividend of $0.29 per share on Sankal Inc.stock.
Sep.	12	Received a cash dividend of $0.24 per share plus an extradividend of $0.06 per share on Sankal Inc. stock.
Dec.	31	Received $56,400 of cash dividends on Imboden Inc. stock.Imboden Inc. reported net income of $489,800 in Year 2. Forte Inc.uses the equity method of accounting for its investment in ImbodenInc.
Dec.	31	Sankal Inc. is classified as an available-for-sale investmentand is adjusted to a fair value of $21 per share. Use the valuationallowance for available-for-sale investments account in making theadjustment for the decrease in fair value from $26 to $21 pershare.

	Required:
1.	Journalize the entries to record these transactions. Refer tothe information given and the Chart of Accounts provided for theexact wording of the answer choices for text entries.
	Prepare the investment-related asset and stockholders’ equitybalance sheet presentation for Forte Inc. on December 31, Year 2,assuming the Retained Earnings balance on December 31, Year 2, is$376,000. Refer to the Chart of Accounts and Amount Descriptionsprovided for the exact wording of the answer choices for textentries. “Less” or “Plus” will automatically appear if it isrequired. For those boxes in which you must enter subtracted ornegative numbers use a minus sign
HART OF ACCOUNTS
Forte Inc.
General Ledger
ASSETS 110 Cash 111 Petty Cash 120 Accounts Receivable 121 Allowance for Doubtful Accounts 131 Notes Receivable 132 Interest Receivable 141 Merchandise Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 161 Investments-Sankal Inc. 163 Investment in Imboden Inc. Stock 165 Valuation Allowance for Trading Investments 166 Valuation Allowance for Available-for-Sale Investments 181 Land 191 Store Equipment 192 Accumulated Depreciation-Store Equipment 193 Office Equipment 194 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Notes Payable 231 Interest Payable 241 Salaries Payable 251 Sales Tax Payable EQUITY 311 Common Stock 312 Paid-In Capital in Excess of Par-Common Stock 321 Preferred Stock 322 Paid-In Capital in Excess of Par-Preferred Stock 331 Treasury Stock 332 Paid-In Capital from Sale of Treasury Stock 340 Retained Earnings 350 Unrealized Gain (Loss) on Available-for-Sale Investments 351 Cash Dividends 352 Stock Dividends 390 Income Summary	REVENUE 410 Sales 611 Interest Revenue 612 Dividend Revenue 621 Income of Imboden Inc. 631 Gain on Sale of Investments 641 Unrealized Gain on Trading Investments EXPENSES 511 Cost of Merchandise Sold 512 Bad Debt Expense 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Repairs Expense 534 Selling Expenses 535 Rent Expense 536 Insurance Expense 537 Office Supplies Expense 538 Store Supplies Expense 561 Depreciation Expense-Store Equipment 562 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense 721 Loss of Imboden Inc. 731 Loss on Sale of Investments 741 Unrealized Loss on Trading Investments