Available-For-Sale Investments With Known Market Value Subject: Porter Inc. is a Canadian public company with a December 31 year end. On January 1, 2007, the company acquires 5,000 shares of Santin Ltd. at a cost of $23 Transaction costs total $1,150 and Porter chooses to include them in the cost of the investment. The investment does not give Porter influence over, or control of, Santin. Porter classifies these shares as available for sale. per share. During the year ending December 31, 2007, Santin Ltd. declares and pays dividends of $0.90 per share. The Santin shares have a quoted market price that is established in an active market. On December 31, 2007, the fair value of the Santin shares has declined to $19 per share. On March 1, 2008, Porter sells all of the Santin shares for $25 per share. Transaction costs for the disposal are $1,250. Provide the journal entries to record the preceding information on the books of Porter Inc. and a summary of the effect of the investment in Santin on Porter's Net Income.
Available-For-Sale Investments With Known Market Value Subject: Porter Inc. is a Canadian public company with a December 31 year end. On January 1, 2007, the company acquires 5,000 shares of Santin Ltd. at a cost of $23 Transaction costs total $1,150 and Porter chooses to include them in the cost of the investment. The investment does not give Porter influence over, or control of, Santin. Porter classifies these shares as available for sale. per share. During the year ending December 31, 2007, Santin Ltd. declares and pays dividends of $0.90 per share. The Santin shares have a quoted market price that is established in an active market. On December 31, 2007, the fair value of the Santin shares has declined to $19 per share. On March 1, 2008, Porter sells all of the Santin shares for $25 per share. Transaction costs for the disposal are $1,250. Provide the
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