Fernandez Corp. invested its excess cash in equity investments during 2010. The business model for these investments is to profit from trading on price changes.

Instructions

(a) As of December 31, 2010, the equity investment portfolio consisted of the following.

What should be reported on Fernandez’s December 31, 2010, statement of financial position relative to these investments? What should be reported on Fernandez’s 2010 income statement? During the year 2011, Fernandez Corp. sold 2,000 shares of Poley Corp. for €38,200 and purchased 2,000 more shares of Lindsay Jones, Inc. and 1,000 shares of Duff Company.
(b) On December 31, 2011, Fernandez’s equity investment portfolio consisted of the following.

What should be reported on Fernandez’s December 31, 2011, statement of financial position? What should be reported on Fernandez’s 2011 income statement?
(c) On December 31, 2012, Fernandez’s equity investment portfolio consisted of the following.

During the year 2012, Fernandez Corp. sold 3,000 shares of Lindsay Jones, Inc. for €39,900 and 500 shares of Duff Company at a loss of €2,700. What should be reported on the face of Fernandez’s December 31, 2012, statement of financial position? What should be reported on Fernandez’s 2012 incomestatement?

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Investment Quantity 1,000 shares 2,000 shares 2,000 shares Cost 15,000 40,000 72,000 Fair Value Lindsay Jones, Inc. Poley Corp. Arnold Aircraft 21,000 42,000 60,000 123,000 Totals 127,000 Investment Quantity 1,000 shares 2,000 shares 1,000 shares 2,000 shares Cost 15,000 33,000 16,000 72,000 Fair Value Lindsay Jones, Inc Lindsay Jones, Inc Duff Company Arnold Aircraft 20,000 40,000 12,000 22,000 94,000 Totals 136,000 Investment Arnold Aircraft Duff Company Quantity 2,000 shares 500 shares Cost Fair Value 82,000 6,000 88,000 72,000 8,000 Totals 80,000