Required: Please consider the three independent scenarios provided below. You are required to: 1. Provide the...

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Required: Please consider the three independent scenarios provided below. You are required to: 1. Provide the relevant accounting journal entries in the books of the investors to record the investment. 2. Justify each of your journal entries including references to specific paragraphs of relevant accounting standards. On the 1s August 2017 Adelaide Ltd purchased 3% of the issued ordinary share capital of Byron Ltd for $235,000 in cash. In addition, Adelaide Ltd incurred brokerage costs of $3,055 which it paid on the same date. Adelaide Ltd's management estimated that the cost of the time spent by Adelaide Ltd's employees in evaluating and transacting the purchase was approximately $750, which was paid as part of the normal salary transactions. As a general accounting policy, the management of Adelaide Ltd have, in accordance with AASB 9, taken changes in the fair value of investments in equity instruments through profit or loss. By 31" December 2017 (Adelaide Ltd's half yearly reporting date) the fair value of the investment in Byron Ltd was determined to be $261,500 based on the current market price of the shares. Required: Please consider the three independent scenarios provided below. You are required to: 1. Provide the relevant accounting journal entries in the books of the investors to record the investment. 2. Justify each of your journal entries including references to specific paragraphs of relevant accounting standards. On the 1s August 2017 Adelaide Ltd purchased 3% of the issued ordinary share capital of Byron Ltd for $235,000 in cash. In addition, Adelaide Ltd incurred brokerage costs of $3,055 which it paid on the same date. Adelaide Ltd's management estimated that the cost of the time spent by Adelaide Ltd's employees in evaluating and transacting the purchase was approximately $750, which was paid as part of the normal salary transactions. As a general accounting policy, the management of Adelaide Ltd have, in accordance with AASB 9, taken changes in the fair value of investments in equity instruments through profit or loss. By 31" December 2017 (Adelaide Ltd's half yearly reporting date) the fair value of the investment in Byron Ltd was determined to be $261,500 based on the current market price of the shares.

Answer rating: 100% (QA)

aJournal entries for the said transactions 11817 Investment in equity sharesByron Ac Dr 235000 To Cash Ac 235000 Purchase Of shares 21817 Investment i... View the full answer