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PR 15-38 Stock investment transactions, equity OBJ.3,4 securities method and available-for-sale Glacier Products Inc. is a wholesaler of rock climbing gear. The es acquired by company began operation g transactions relate to securities acquired by Glacier Excel Products Inc, which has a fiscal year ending on December Jan. 18. Purchased 9,000 shares of Malmo Inc, as an availa July 22. A cash dividend of $3 per share was received on Dec. 18. Received a regular cash dividend of $30 per share Year 1 ble-for-sale investment at $40 per share, including the brokerage commission the Malmo stock. Oct. 5. Sold 500 shares of Malmo Inc. s commission of $100 tock at $58 per share less a brokerage on Malmo Inc. stock. Malmo Inc. is classified as an available-for-sale investment and is adjusted to a Tair value of $36 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment. Year 2 Jan. 25. Purchased an influential interest in Helsi Co. for $800,000 by purchasing 75,000 shares directly from the estate of the founder of Helsi. There are 250,000 shares of Helsi Co. stock outstanding. July 16. Received a cash dividend of $3 per share on Malmo Inc. stock. Dec. 16. Received a cash dividend of $3 per share plus an extra dividend of $0.20 per share on Malmo Inc. stock. Received $38,000 of cash dividends on Helsi Co. stock. Helsi Co. reported net income of $170,000 in Year 2. Glacier Products Inc. uses the equity method of accounting for its investment in Helsi Co. 31. 31. Malmo Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $44 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the increase in fair value from $36 to $44 per share. Instructions 1. Journalize the entries to record the preceding transactions 2. Prepare the investment-related asset and stockholders' equity balance sheet presenta- tion for Glacier Products Inc. on December 31, Year 2, assuming that the Retained Earnings balance on December 31, Year 2, is $700,000

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