Perry company had no short-term investment prior to year 2011.it had the following transactions involving short-term investment in available for-sale securities during 2011.

Perry company had no short-term investment prior to year 2011.it had the following transactions involving short-term investment in available for-sale securities during 2011.April 16 purchased 8,000 shares of Gem Co. stock at $24.25 per share plus a $360 brokerage fee.May 1 paid $200,000 to buy 90-day U.S treasury bills 9 (debt securities); $200,000 principle amount 6% interest securities dated may 1July 7 purchased 4,000 shares of Pepsi Co stock at $49.25 share plus a $350 brokerage fee.20 purchased 2,000 share of Xerox stock at $16.75 per share plus $ 410 brokerage fee.Aug.3 received a check for principle and accrued interest on the US. Treasury bills that matured on July 2915 received an 0.85 per share cash dividend on the Gem Co. stock.28 solid 4,000 shares of Gem Co. stock at $ 30 per share less a $450 brokerage fee.Oct.1 received a $ 1.90 per share cash dividend on the PepsiCo sharesDec. 15 received a $ 1.05 per share cash dividend on the remaining Gem Co shares.Dec 31 received a $1.30 per share cash dividend on the PepsiCo shares.Required1. Prepare journal entries to record the preceding transactions and events.2. Prepare a table to compare the year –end cost and fair values of Perry’s short-term investment in available-for sale securities. The year-end fair values per shares are Gem Co, $ 26.50 PepsiCo, $ 46.50 and Xerox, $ 13.753. prepare an adjusting entry, if necessary, to record the year-end fair values adjusting for the portfolio of short-term investment in available –for-sale securities.Analysis Component4. Explain the balance sheet presentation of the fair value adjustment for Perry’s short-term investment.5. How do these short-term investment affect Perry’s (a)income statement for year 2011(b) the equity section of its balance sheet at year-end 2011?

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