Stock Investment Transactions, Equity Method and Available-for-Sale Securities

Roman Products, Inc., is a wholesaler of men's hair products. The company began operations on January 1, 2014. The following transactions relate to securities acquired by Roman Products, Inc., which has a fiscal year ending on December 31:

2014
Jan. 3	Purchased 7,600 shares of Whalen Inc. as an available-for-sale security at $54 per share, including the brokerage commission.
July 8	Received a cash dividend of $0.60 per share on the Whalen stock.
Oct. 19	Sold 3,400 shares of Whalen Inc. stock at $58 per share, less a brokerage commission of $40.
Dec. 12	A cash dividend of $0.60 per share was received on the Whalen stock.
Dec. 31	Whalen Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $52 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.
2015
Jan. 5	Purchased an influential interest in Tasmania Inc. for $760,000 by purchasing 31,500 shares directly from the estate of the founder of Tasmania Inc. There are 90,000 shares of Tasmania Inc. stock outstanding.
July 9	Received a cash dividend of $0.70 per share on Whalen Inc. stock.
Dec. 8	Received a cash dividend of $0.70 per share plus an extra dividend of $0.10 per share on Whalen Inc. stock.
Dec. 31	Received $23,000 of cash dividends on Tasmania Inc. stock. Tasmania Inc. reported net income of $95,000 in 2015. Roman Products uses the equity method of accounting for its investment in Tasmania Inc.
Dec. 31	Whalen Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $58 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment for the change in fair value from $52 to $58 per share.

Required:

1. Journalize the entries to record the preceding transactions. For a compound transaction, if an amount box does not require an entry, leave it blank.

Date	Amount	Debit	Credit
2014
Jan. 3

July 8

Oct. 19

Dec. 12

Dec. 31

2015
Jan. 5

July 9

Dec. 8

Dec. 31-Dividends

Dec. 31-Income

Dec. 31-Valuation

2. Prepare the investment-related asset and stockholders' equity balance sheet presentation for Roman Products, Inc., on December 31, 2015, assuming the Retained Earnings balance on December 31, 2015, is $555,000.

Roman Products, Inc. Balance Sheet (selected items) December 31, 2015
Current Assets:

Investments:

Stockholders' Equity: