During 2019, Heather Ltd. purchased 6,000 shares of Oaktree Corp. for $31 per share ($186,000 total). Heather

Question:

During 2019, Heather Ltd. purchased 6,000 shares of Oaktree Corp. for $31 per share ($186,000 total). Heather held these shares until September 2021, when it sold them for $36 per share. During these three years, Oaktree paid dividends of $1 per share on July 31. On Heather’s fiscal year-end (December 31), shares of Oaktree closed at $34, $29, and $38 in 2019, 2020, and 2021, respectively.

Required:

Assume that the company designated half of the Oaktree shares as FVPL and the other half irrevocably elected to record fair value changes through OCI. Determine the amounts to be reported on Heather’s balance sheet and statement of comprehensive income with respect to the company’s investment in Oaktree Corp. What do you observe about the total amount of retained earnings for the three years combined?

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Intermediate Accounting Volume 1

ISBN: 9780135236109

4th Edition

Authors: Kin Lo, George Fisher

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Question Posted: Mar 04, 2023 09:30 AM

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During 2019, Heather Ltd. purchased 6,000 shares of Oaktree Corp. for $31 per share ($186,000 total). Heather

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Solution We need to determine the amounts to be reported on Heathers balance sheet and statement of comprehensive income for its investment in Oaktree ...View the full answer

Intermediate Accounting Volume 1

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