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Accounting treatment Marx Company acquired the following shares in the Hong Kong Stock Exchange on 15 October 2017, which it intended to sell in early

Accounting treatment

Marx Company acquired the following shares in the Hong Kong Stock Exchange on 15 October 2017, which it intended to sell in early 2018 to take advantage of the expected changes in the share prices:

*200,000 ordinary shares of Arthur Ltd at $18.00 per share plus transaction costs of $3,500; and

*160,000 ordinary shares of Bessie Ltd at $26.00 per share plus transaction costs $4,800.

At its year end on 31 December 2017, the shares were quoted on the Hong Kong Stock Exchange at the following prices:

*Ordinary share of Arthur Ltd: $15.00 per share; and

*Ordinary shares of Bessie Ltd: $27.00 per share.

Required:

Discuss and demonstrate the appropriate accounting treatment for the financial assets.

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