Whispering, Inc. had the following equity investment portfolio at January 1, 2017. Evers Company 1,030 shares...

Whispering, Inc. had the following equity investment portfolio at January 1, 2017.

Evers Company	1,030 shares @ $14 each	$14,420
Rogers Company	910 shares @ $19 each	17,290
Chance Company	510 shares @ $9 each	4,590
Equity investments @ cost		36,300
Fair value adjustment		(7,350	)
Equity investments @ fair value		$28,950

During 2017, the following transactions took place.

1.		On March 1, Rogers Company paid a $2 per share dividend.
2.		On April 30, Whispering, Inc. sold 280 shares of Chance Company for $10 per share.
3.		On May 15, Whispering, Inc. purchased 110 more shares of Evers Company stock at $15 per share.
4.		At December 31, 2017, the stocks had the following price per share values: Evers $16, Rogers $18, and Chance $8.

During 2018, the following transactions took place.

5.		On February 1, Whispering, Inc. sold the remaining Chance shares for $8 per share.
6.		On March 1, Rogers Company paid a $2 per share dividend.
7.		On December 21, Evers Company declared a cash dividend of $3 per share to be paid in the next month.
8.		At December 31, 2018, the stocks had the following price per share values: Evers $18 and Rogers $20.

Prepare journal entries for each of the above transactions.

Prepare a partial balance sheet showing the investment-related amounts to be reported at December 31, 2017 and 2018.

Expert Solution

Year 2017
Equity investments @ cost	Evers	Rogers	Chance	Total
Equity investments @ cost at beginning Value	14,420	17,290	4,590	36,300
Less: cost of share sold			(2,520)	(2,520)
Add: Additional Purchase	1,650			1,650
Equity investments @ cost at Dec 31, 2017	$ 16,070	$ 17,290	$ 2,070	$ 35,430

Equity investments @ fair	Evers (1030+110)	Rogers	Chance (510-280)	Total
Number of share	1,140	910	230
Multiply: Market price per share	16	18	8
Equity investments @ fair	18,240	16,380	1,840	$ 36,460

Equity investments @ cost				$ 35,430
Equity investments @ fair value				$ 36,460
Increase in Fair value adjustment (36460-35430)				$ 1,030
Less: negative Fair value adjustment at beginning of 2017 [-(-7350) = 7350]				$ 7,350
Adjustment entry for Fair value				$ 8,380

Year 2018
Equity investments @ cost	Evers	Rogers	Chance	Total
Equity investments @ cost at Dec 31, 2017	16,070	17,290	2,070	35,430
Less: cost of share sold			(2,070)	(2,070)
Add: Additional Purchase	-			-
Equity investments @ cost at Dec 31, 2018	$ 16,070	$ 17,290	$ -	$ 33,360

Equity investments @ fair	Evers	Rogers	Chance (230-230)	Total
Number of share	1,140	910	-
Multiply: Market price per share	18	20	-
Equity investments @ fair	20,520	18,200	-	$ 38,720

Equity investments @ cost				$ 33,360
Equity investments @ fair value				$ 38,720
Increase in Fair value adjustment (38720-33360)				$ 5,360
Less: Fair value adjustment at beginning of 2018				(1,030)
Adjustment entry for Fair value				$ 4,330

Whispering, Inc.
Transaction	Date	General Journal	Debit	Credit
1	March 1, 2017	Cash	1,820
		Dividend Income		1,820
		(To record dividend received from Rogers company) (910*2)

2	April 30, 2017	Cash (280*10)	2,800
		Gain on sales of investment (280*(10-9))		280
		Investment in equity portfolio (280*9)		2,520
		(To record sale share of Chance.)

3	May 15, 2017	Investment in equity portfolio	1,650
		Cash		1,650
		(To record purchase of Evers shares.) (110*15)

4	December 31, 2017	Investment in equity portfolio	8,380
		Fair value adjustment		8,380
		(To record entry for Fair value adjustment.)

5	February 1, 2018	Cash (230*8)	1,840
		Loss on sales of investment (230*(9-8))	230
		Investment in equity portfolio (230*9)		2,070
		(To record sale share of Chance.)

6	March 1, 2018	Cash	1,820
		Dividend Income		1,820
		(To record dividend received from Rogers company) (910*2)

7	December 21, 2018	Dividend Receivable	3,420
		Dividend Income		3,420
		(To record dividend declared but to be received in next month from Evers company) (1140*3)

8	December 31, 2018	Investment in equity portfolio	4,330
		Fair value adjustment		4,330
		(To record entry for Fair value adjustment.)

Whispering, Inc.
Partial Balance sheet
As at December 31, 2017
Investment @ cost	35,430
Fair value adjustment	1,030
Investment value Reported In the Balance sheet	36,460

Whispering, Inc.
Partial Balance sheet
As at December 31, 2018
Investment @ cost	33,360
Fair value adjustment	5,360
Investment value Reported In the Balance sheet	38,720
Dividend Receivable	3,420

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