On January 31, 20X1, the year-end date, the Bton company owned 10,000 shares of the Bretagne company,

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Question:

On January 31, 20X1, the year-end date, the Bton company owned 10,000 shares of the Bretagne company, for which it had paid $42 per share. The fair market value on that date was $450,000. Bton had classified this investment at fair value through profit or loss (FVTPL).

For the financial year ended January 31, 20X2, Bton Company carried out the following operations concerning its investment portfolio:

March 1: Bretagne declares a dividend of $3 per share, payable on May 1 to shareholders of record on March 15.

April 1: Purchase of 10,000 Bretagne shares for $32 each plus brokerage fees of $2,000.

May 1: Collection of the Brittany dividend.

1st: Transfer of 5000 shares of Bretagne at $36 each; in addition, for this transaction, the Bton company pays $1,000 in brokerage fees.

September 30: Purchase of 1000 bonds from the Haro company for $864,097. The bonds have a nominal value of $1,000 each, mature on September 30, 20Y1 and bear interest at an annual rate of 6%, payable semi-annually on September 30 and March 31. These investments will be held until maturity and are considered at amortized cost. The real return is 8% annually.

December 1: Purchase of 1000 shares of Aura for $40,000 plus $500 brokerage fees. This investment is classified at fair value through other comprehensive income (FVBAERG).

On January 31, 20X2, the market value of Bretagne's shares was $37 each, Aura's was $42 each and Haro's bonds were trading at $104.

Work to do:

Make all necessary entries in Bton's books for the year ended 31 January 20X2 to record the above transactions and any necessary adjusting entries at the end of the year. When this is the case, clearly indicate whether the amounts should appear in the statement of income (ER) or in other items of comprehensive income (AERG). The Company reassesses its investments when it becomes aware of variations in market values.