Recording Passive Investments – Below are selected T-accounts for the RunnerTech Company. Balance Sheet Accounts(In Other Investments) Investments in SAS(In Other Comprehensive Income)Net Unrealized Losses/Gains—SAS1-Jan5,587Purchase19,0001,5651-JanAJE?15,239SaleSale??AJE31-Dec14,5585,68331-DecIncome Statement AccountsDividend RevenueGain on Sale of Investments?Earned2,384Sale7,77131-Dec2,38431-DecRequired:Complete the following journal entries and answer the following questions:a. Purchased securities available for sale for cash. Prepare the journal entry.b. Received cash dividends on the investments. Prepare the journal entry.c. Sold SAS investments at a gain. Prepare the journal entry.d. At year-end, the SAS portfolio had a fair value of $14,558. Prepare the adjusting entry.e. What would be reported on the balance sheet related to the SAS investments on December 31?f. What would be reported on the income statement for the year?g. How would year-end reporting change if the investments were categorized as trading securities instead of securities available for sale?
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