Pina Colada Corporation made the following purchases of investments during 2020, the first year in which Pina
Question:
Pina Colada Corporation made the following purchases of investments during 2020, the first year in which Pina Colada invested in equity securities:
1. | On January 15, purchased 10,260 shares of Nirmala Corp.’s common shares at $38.20 per share plus a commission of $2,256. | |
2. | On April 1, purchased 5,700 shares of Oxana Corp.’s common shares at $59 per share plus a commission of $3,842. | |
3. | On September 10, purchased 7,980 shares of WTA Corp.’s preferred shares at $30.50 per share plus a commission of $3,317. |
On May 20, 2020, Pina Colada sold 3,420 of the Nirmala common shares at a market price of $40 per share with fewer brokerage commissions of $3,249. The year-end fair values per share were as follows: Nirmala $34, Oxana $63, and WTA $32. The chief accountant of Pina Colada tells you that Pina Colada Corporation holds these investments with the intention of selling them in order to earn short-term profits from appreciation in their prices and accounts for them using the FV-NI model.
Assume that Pina Colada Corporation follows IFRS 9.
Intermediate Accounting Volume 1
ISBN: 978-1119496496
12th Canadian edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy