Gamma Securities Corporation (GSC) is a public company with a December 31 year-end. GSC has never reported other comprehensive income (OCI) from a previous period on its Statement of Comprehensive Income. On April 30, 2018, GSC purchased for cash 6,000 shares of Bishop Ltd. for $13 per share. In addition, GSC paid a commission of $600 on this transaction. On November 30, 2018, GSC received a $0.45 per share dividend on the Bishop shares. On December 31, 2018, the Bishop shares had a fair value of $11 per share.

On November 30, 2019, GSC received a $0.62 per share dividend on the Bishop shares. On December 31, 2019, the Bishop shares had a fair value of $15 per share.

On January 31, 2020, GSC sold all of the Bishop shares for $16.50 per share less $700 paid as a commission. Disregard income tax implications.

Required:

1. Assume Gamma Securities Corporation classifies this investment under the Cost Model. Complete the table below, where appropriate, by determining the amounts to be reported on Gamma’s Statement of Financial Position and Statement of Comprehensive Income with respect to the accounts listed for the years 2018, 2019, and 2020.

2. Assume Gamma Securities Corporation classifies this investment under the FV-NI Model. Complete the table below, where appropriate, by determining the amounts to be reported on Gamma’s Statement of Financial Position and Statement of Comprehensive Income with respect to the accounts listed for the years 2018, 2019, and 2020.

3. Assume Gamma Securities Corporation classifies this investment under the FV-OCI Without Recycling Model. Complete the table below, where appropriate, by determining the amounts to be reported on Gamma’s Statement of Financial Position and Statement of Comprehensive Income with respect to the accounts listed for the years 2018, 2019, and 2020.

Important Note:

If you feel no amount is to be entered against a listed account shown in any of the three tables below, leave the corresponding space blank. For example, under the Cost Model, if you feel there is no unrealized holding loss/ (gain) for any particular year(s), leave the corresponding space(s) blank.

Cost Model:

	2018	2019	2020
Statement of Comprehensive Income
Dividend revenue
Commissions expense
Unrealized holding loss / (gain)
Realized loss / (gain) on sale
Statement of Financial Position
L/T Investment in Bishop Ltd.

Question No. 3 (24 marks)

FV-NI Model:

	2018	2019	2020
Statement of Comprehensive Income
Dividend revenue
Commissions expense
Unrealized holding loss / (gain) - NI
Realized loss / (gain) on sale
Statement of Financial Position
L/T Investment in Bishop Ltd.

FV-OCI Without Recycling Model:

	2018	2019	2012
Statement of Comprehensive Income
Dividend (revenue)
Commissions expense
Unrealized holding loss / (gain) – OCI
Realized loss / (gain) on sale
Statement of Financial Position
L/T Investment in Bishop Ltd.
AOCI: – OCI Unrealized holding loss / (gain)
Retained Earnings

Supporting Calculations

Answer rating: 100% (QA)

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