Fernandez SA invested its excess cash in equity investments during 2022. The business model for these investments is to profit from trading on price changes.

Instructions

a. As of December 31, 2022, the equity investment portfolio consisted of the following.

What should be reported on Fernandez’s December 31, 2022, statement of financial position relative to these investments? What should be reported on Fernandez’s 2022 income statement? 

b. During the year 2023, Fernandez 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. On December 31, 2023, Fernandez’s equity investment portfolio consisted of the following.

What should be reported on Fernandez’s December 31, 2023, statement of financial position? What should be reported on Fernandez’s 2023 income statement?

c. During the year 2024, Fernandez sold 3,000 shares of Lindsay Jones, Inc. for €39,900 and 500 shares of Duff Company at a loss of €2,700. On December 31, 2024, Fernandez’s equity investment portfolio consisted of the following.

What should be reported on the face of Fernandez’s December 31, 2024, statement of financial position? What should be reported on Fernandez’s 2024 income statement?

Transcribed Image Text:

Investment Quantity Cost Fair Value Lindsay Jones, Inc. 1,000 shares € 15,000 € 21,000 Poley Corp. 2,000 shares 40,000 42,000 Arnold Aircraft 2,000 shares 72,000 60,000 Totals €127,000 €123,000