Question
A. OnJanuary 1, 20X1 ABC Co. acquired 2,000 shares of XYZ Inc at P10 per share. ABC incurred P1,000 brokerage commission on the acquisition. On
A. OnJanuary 1, 20X1 ABC Co. acquired 2,000 shares of XYZ Inc at P10 per share. ABC incurred P1,000 brokerage commission on the acquisition. On Dec 31, 20x1 the quoted price was P6 per share. On January 5, 20X2 half of the shares were sold for P4 per share. Commission paid was P200.
Requirements:
1. Journal entries assuming that:
a. The investment is classified as held for trading.
b. The investment is classified as FVOCI.
2. Under held for trading model, how much is the carrying value of the investment account at Dec 31, 20x1?
3. Under the FVOCI model, how much is the carrying value of the investment account at Dec. 31, 20X1?
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Intermediate Accounting Volume 1
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
12th Canadian edition
119-49633-5, 1119496497, 1119496330, 978-1119496496
