CDF is a manufacturer of commercial drones (UAV's unmanned arial vehicles). CDF is publicly traded and...

   

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CDF is a manufacturer of commercial drones (UAV's unmanned arial vehicles). CDF is publicly traded and has a December 31st year end. You are a co-op student working in the financial reporting department. CDF shares are currently trading at $146 per share and analysts are recommending the purchase of CDF shares based on their projections of a significant increase in net income and EPS for the December 31, 2020 year-end. Investment: General Stark Inc. (GSC) Bonds On April 1, 2019, CDF acquired 800 bonds issued by GSC. Each bond has a $1,000 face value and matures on April 1, 2024. GSC issued 100,000 bonds on that date and the market rate at the time for bonds of a similar risk profile was 5%. The market rate for bonds of this risk profile remained at 5% on December 31, 2019. The bonds pay 6% interest annually on March 31st. The fair value of CDF's investment in GSC bonds was $860,000 on December 31, 2020. CDF reported net income of $9,650,000 for 2019 and $13,300,000 for 2020. The bonds are held by CDF as part of a portfolio of investments that may be held to maturity or may be sold with favourable changes to interest rates. Instructions: 1. Your analysis of the investment can assume that they meet the criteria of an Asset or Financial Asset and the criteria for recognition of a Financial Asset on the statements. Your response does not need to address these issues. 2. Prepare all 2020 journal entries for the four investments and provide details for all calculations. Complete the 3 tables below that provide (the tables relate only to the four investments): a. the comparative year-end balances for the financial assets that would be included on the Statement of Financial Position (update the investment account names in the table to ones that inform the users regarding the accounting for the respective investments). b. the Net Income and Cash Income amounts the investment. c. The amounts included in Retained Earnings and Accumulated Other Comprehensive Income during 2020 related to the investment. Statement of Financial Position Information: GSC Bonds Statement of Comprehensive Income Information: GSC Bonds Statement of Financial Position & Changes in Shareholders Equity Info: Amounts related to the investment in 2020 Dec 31, 2020 2020 OCI Dec 31, 2019 2020 Net Income Amounts included in Retained Earnings for 2020 2020 Cash Income Amounts included in. Accumulated Other Comprehensive Income in 2020 CDF is a manufacturer of commercial drones (UAV's unmanned arial vehicles). CDF is publicly traded and has a December 31st year end. You are a co-op student working in the financial reporting department. CDF shares are currently trading at $146 per share and analysts are recommending the purchase of CDF shares based on their projections of a significant increase in net income and EPS for the December 31, 2020 year-end. Investment: General Stark Inc. (GSC) Bonds On April 1, 2019, CDF acquired 800 bonds issued by GSC. Each bond has a $1,000 face value and matures on April 1, 2024. GSC issued 100,000 bonds on that date and the market rate at the time for bonds of a similar risk profile was 5%. The market rate for bonds of this risk profile remained at 5% on December 31, 2019. The bonds pay 6% interest annually on March 31st. The fair value of CDF's investment in GSC bonds was $860,000 on December 31, 2020. CDF reported net income of $9,650,000 for 2019 and $13,300,000 for 2020. The bonds are held by CDF as part of a portfolio of investments that may be held to maturity or may be sold with favourable changes to interest rates. Instructions: 1. Your analysis of the investment can assume that they meet the criteria of an Asset or Financial Asset and the criteria for recognition of a Financial Asset on the statements. Your response does not need to address these issues. 2. Prepare all 2020 journal entries for the four investments and provide details for all calculations. Complete the 3 tables below that provide (the tables relate only to the four investments): a. the comparative year-end balances for the financial assets that would be included on the Statement of Financial Position (update the investment account names in the table to ones that inform the users regarding the accounting for the respective investments). b. the Net Income and Cash Income amounts the investment. c. The amounts included in Retained Earnings and Accumulated Other Comprehensive Income during 2020 related to the investment. Statement of Financial Position Information: GSC Bonds Statement of Comprehensive Income Information: GSC Bonds Statement of Financial Position & Changes in Shareholders Equity Info: Amounts related to the investment in 2020 Dec 31, 2020 2020 OCI Dec 31, 2019 2020 Net Income Amounts included in Retained Earnings for 2020 2020 Cash Income Amounts included in. Accumulated Other Comprehensive Income in 2020

Answer rating: 100% (QA)

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