McElroy plc has the following portfolio of investments at September 30, 2022, its last reporting date.

On October 10, 2022, the Horton shares were sold at a price of £54 per share. In addition, 3,000 ordinary shares of Patriot were acquired at £54.50 per share on November 2, 2022. The December 31, 2022, fair values were Monty £106,000, Patriot £132,000, and Oakwood £193,000. All the investments are classified as trading.

Instructions

a. Prepare the journal entries to record the sale, purchase, and adjusting entries related to the trading investments in the last quarter of 2022.

b. How would the entries in part (a) change if the investments were classified as non-trading?

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Fair Value Trading Investments Cost Horton, Inc. ordinary (5,000 shares) £215,000 £200,000 Monty, Inc. preference (3,500 shares) 133,000 140,000 Oakwood Corp. ordinary (1,000 shares) 180,000 179,000