The beginning balance sheet of Water Source Co included

a #436
The beginning balance sheet of Water Source Co. included a $800,000 investment in Larsen
stock (35% ownership).During the year, Water Source completed the following investment
transactions:Mar. 3 Purchased 6,000 shares at $7 per share of Jack Software common stock as
a long-term, available-for-sale investment, representing 3% ownership.May 15 Received a cash
dividend of $0.53 per share on the Jack investment.Dec. 15 Received a cash dividend of
$110,000 from Larsen investment.31 Received Larsen's annual report showing $110,000 of net
income.31 Received Jack's annual report showing $600,000 of net income for the year. 31
Larsen's stock fair value at year-end was $728,500.31 Jack's common stock fair value at year-
end was $10 per share.Requirements1. Journalize the transactions for the year of Water
Source.2. Post transactions to T-accounts to determine the December 31, 2016, balances
related to the investment and investment income accounts.3. Prepare Water Sources partial
balance sheet at December 31, 2016, from your answers in Requirement 2.View Solution:
The beginning balance sheet of Water Source Co included a

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