The following accounts appear in the ledger of Samson Inc
The following accounts appear in the ledger of Samson Inc. Samson’s shares trade on the Toronto and New York stock exchanges and so the company uses IFRS. Samson made a special election to account for shares held in Anderson Corp. as FV-OCI and to reclassify out of OCI and into net income investment holding gains that are realized. It also chooses to classify dividends received as operating cash flows. Samson’s investment in Anderson Corp. is not strategic and is classified as a long-term investment.
(a) Prepare a partial comparative statement of financial position for Samson Inc. at the fiscal year end of December 31, 2011.
(b) Prepare an income statement, a statement of comprehensive income, and a statement of changes in accumulated other comprehensive income for the year ended December 31, 2011.
(c) Prepare the journal entries dated June 30, August 15, and November 3, 2011. Provide explanations to the entries.
(d) Using the direct and the indirect methods, prepare a table that contrasts the presentation of all transactions recorded in the ledger accounts provided on Samson’s statement of cash flows. Be specific about the classification within the statement for each item that is reported. What other choices could Samson have used in the classification of cash flows?
(e) How would your answer to parts (b) and (d) above change if the investments were accounted for using the fair value through net income model?
(f) What would be the reason why Samson would not use the fair value through other comprehensive income model?
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