Forte Inc. produces and sells theater set designs and costumes. The company bega
ID: 2491661 • Letter: F
Question
Forte Inc. produces and sells theater set designs and costumes. The company began operations on January 1, 2016. The following transactions relate to securities acquired by Forte Inc., which has a fiscal year ending on December 31:
Record these transactions on page 10:
Record these transactions on page 11:
Prepare the investment-related asset and stockholders’ equity balance sheet presentation for Forte Inc. on December 31, 2017, assuming the Retained Earnings balance on December 31, 2017, is $389,000. Refer to the Chart of Accounts and Amount Descriptions provided for the exact wording of the answer choices for text entries. “Less” or “Plus” will automatically appear if it is required. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
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JOURNAL
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JOURNAL
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Forte Inc.
Balance Sheet (selected items)
December 31, 2017
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2016 Jan. 22 Purchased 22,000 shares of Sankal Inc. as an available-for-sale security at $18 per share, including the brokerage commission. Mar. 8 Received a cash dividend of $0.22 per share on Sankal Inc. stock. Sep. 8 A cash dividend of $0.25 per share was received on the Sankal stock. Oct. 17 Sold 3,000 shares of Sankal Inc. stock at $16 per share, less a brokerage commission of $75. Dec. 31 Sankal Inc. is classified as an available-for-sale investment and is adjusted to a fair value of $25 per share. Use the valuation allowance for available-for-sale investments account in making the adjustment.Explanation / Answer
Forte Inc Journal Entries 2016 DATE Description Debit$ Credit $ 22-Jan Investments - Sankal Inc 396000 Cash 396000 8-Mar Cash 4840 Devidend Revenue 4840 (22,000*0.22) 8-Sep Cash 5500 Devidend Revenue 5500 (22,000*0.25) 18-Oct Cash 47925 Loss on sale of Investment 6075 Investments - Sankal Inc 54000 31-Dec Valuation Allowance for Available-for-Sale Investments 133000 Unrealized Gain (Loss) on Available-for-Sale Investments 133000 Forte Inc Journal Entries 2017 DATE Description Debit$ Credit $ 10-Jan Investment in Imboden Inc. Stock 720,000 Cash 720,000.00 10-Mar Cash 5700 Devidend Revenue 5700 (96,000*0.30) 9600 12-Sep Cash 5700 Devidend Revenue 5700 (22,000*0.25) 31-Dec Cash 57600 Investment in Imboden Inc. Stock 57600 Investments - Sankal Inc 31-Dec Investment in Imboden Inc. Stock 144000 Income of Imboden Inc. 144000 31-Dec Unrealized Gain (Loss) on Available-for-Sale Investments 57000 Valuation Allowance for Available-for-Sale Investments 57000 Forte Inc Balance Sheet (selected items) December 31, 2017 Current assets: Amount in $ Amount in $ Available-for-sale investments (at cost) 342000 Plus valuation allowance for available-for-sale investments 76000 Available-for-sale investments (at fair value) 418000 Noncurrent assets: Investments in Imboden Inc. stock ` 806400 Stockholders' equity Retained earnings 389000 Unrealized gain (loss) on available-for-sale investments 76,000 76000