(Learning Objective 1, 2: Accounting for available for sale and equity method investments) The beginning balance sheet of NASDOQ Corporation included the following:
|
Long Term Investment in MSC Software (equity method investment) |
$619,000 |
NASDOQ completed the following investment transactions during the year:
|
Mar.16 |
Purchased 2,000 shares of ATI, Inc., common stock as a longterm available for sale investment, paying $12.25 per share. |
|
May.21 |
Received cash dividend of $0.75 per share on the ATI investment. |
|
Aug. 17 |
Received cash dividend of $81,000 from MSC Software. |
|
Dec. 31 |
Received annual report from MSC Software; net income for the year was $550,000. Of this amount, NASDOQ’s proportion is 22%. |
Required
1. Record the transactions in the journal of NASDOQ Corporation.
2. Post entries to the T account for Long Term Investment in MSC and determine its balance at December 31.
3. Show how to report the Long Term Available for Sale Investments and the Long Term Investment in MSC accounts on NASDOQ’s balance sheet at December 31.