Question: please only answer if you are sure about your answer. During 2020 a company was formed. The company invested in the following shares in 2020:
please only answer if you are sure about your answer.
During 2020 a company was formed. The company invested in the following shares in 2020:
|
| Purchase Price in 2020 | Transaction fees in 2020 | Fair Value Dec 31, 2020 |
| Dunder Inc. | $50,000 | $1,500 | $51,000 |
| Mifflin Ltd. | $78,000 | $3,000 | $78,000 |
| Sabre Inc. | $100,000 | $3,500 | $110,000 |
| Athlead Inc. | $103,000 | $4,000 | $106,000 |
In 2021, the company sold the investment in Dunder Inc. for $60,000 and paid transaction costs of
$1,200. The shares of Athlead Inc. were also sold for $100,000 and transaction fees amounted to $2,800.
The company also acquired the shares of Schrute Co. for $89,000, plus transaction fees of $2,200. On December 31, 2021, the fair values of the shares on hand were as follows:
|
| Fair Value Dec 31, 2021 |
| Mifflin Ltd. | $82,000 |
| Sabre Inc. | $94,000 |
| Schrute Co. | $77,000 |
Required:
- Prepare the journal entries in 2020 and 2021 assuming that
i) The investments are classified as FVTPL investments. ii) The investments are classified as FVTOCI investments.
- Under assumption ii) calculate the balance in the AOCI account on December 31, 2021 and specify if it is a debit or credit balance.
- Under assumption ii) calculate the amount of OCI that will be reported in the Statement of Comprehensive Income of 2021, and specify if it is a positive or negative amount.
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