Birch Corp. is a real estate developer with its headquarters in Burlington, Ontario. As a result of recent increases in land prices, Birch has accumulated a substantial amount of excess cash. It is looking to invest in a building supply company, but has not yet found a suitable company. To earn a reasonable return and to minimize risk, Birch invests its excess cash in common shares of large, stable corporations. The following describes the events surrounding one of Birch€™s investments:
1. On January 1, 2011, Birch paid $1,000,000 to purchase 100,000 common shares of Poplar Inc.
2. On December 27, 2011, Poplar declared and paid a dividend of $0.50 per common share.
3. On December 31, 2011, the market value of the common shares was $1,030,000.
4. On June 30, 2012, Birch sold the common shares for $1,045,000.
Required:
Using the following table, indicate the amounts to be reported on the balance sheet, through profit or loss, and through other comprehensive income for 2011 and 2012 under two scenarios:
a. Birch designates the common shares as an available-for-sale (AFS) investment.
b. Birch designates the common shares as a held-for-trading (HFT) investment.

Transcribed Image Text:

AFS HFT 2011 2012 2011 2012 Balance sheet Amount through profit or loss Other comprehensive income