Concord Corporation made the following purchases of investments during 2020, the first year in which Concord invested in equity securities:
Concord Corporation made the following purchases of investments during 2020, the first year in which Concord invested in equity securities: 1. On January 15, purchased 6,390 shares of Nirmala Corp.'s common shares at $23.80 per share plus commission of $1,407. 2. On April 1, purchased 3,550 shares of Oxana Corp.'s common shares at $37 per share plus commission of $2,393. 3. On September 10, purchased 4,970 shares of WTA Corp.'s preferred shares at $18.80 per share plus commission of $2,066. On May 20, 2020, Concord sold 2,130 of the Nirmala common shares at a market price of $25 per share less brokerage commissions of $2,024. The year-end fair values per share were as follows: Nirmala $21, Oxana $39, and WTA $20. The chief accountant of Concord tells you that Concord Corporation holds these investments with the intention of selling them in order to earn short-term profits from appreciation in their prices and accounts for them using the FV-NI model. Assume that Concord Corporation follows IFRS 9. Repeat the parts above, assuming the investments are accounted for using FV-OCI with no recycling. Concord's policy is to capitalize transaction costs on the acquisition of FV- OCI investments and reduce the proceeds on disposal. In addition, the company reclassifies any gains or losses on disposition to Retained Earnings. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit (a) Jan. 15 FV-OCI Investments 153489 Cash 153489 Apr. 17 FV-OCI Investments 133743 Cash 133743 Sep. 10 FV-OCI Investments 95502 Cash 95502 (b) May 20 FV-OCI Investments 51289 51289 Unrealized Gain or Loss (To adjust to fair value at date of disposal) May 20 Cash 51226 51226 FV-OCI Investments (To record disposal) May 20 Unrealized Gain or Loss 51289 51289 Retained Earnings (To reclassify holding gain) (c) Dec. 31 Unrealized Gain or Loss - FV-OCI Investments What is the amount that will be reported as other comprehensive income for the year ended December 31, 2020? Show the wording that would appear on the comprehensive income statement. (If an amount reduces the account balance then enter with negative sign.) Other Comprehensive Income Items that may not be reclassified subsequently to net income Fair value adjustment May 20 On Nirmala Corp. shares sold 51226 Year end fair value adjustment for portfolio 188008 Holding losses arising during the year Total What will be the balance in Accumulated Other Comprehensive Income on December 31, 2020? (If an amount reduces the account balance then enter with negative sign.) Balance of Accumulated Other Comprehensive Income: Beginning balance Other comprehensive income for 2020 V Less Reclassification adjustment Ending balance December 31, 2020 Concord Corporation made the following purchases of investments during 2020, the first year in which Concord invested in equity securities: 1. On January 15, purchased 6,390 shares of Nirmala Corp.'s common shares at $23.80 per share plus commission of $1,407. 2. On April 1, purchased 3,550 shares of Oxana Corp.'s common shares at $37 per share plus commission of $2,393. 3. On September 10, purchased 4,970 shares of WTA Corp.'s preferred shares at $18.80 per share plus commission of $2,066. On May 20, 2020, Concord sold 2,130 of the Nirmala common shares at a market price of $25 per share less brokerage commissions of $2,024. The year-end fair values per share were as follows: Nirmala $21, Oxana $39, and WTA $20. The chief accountant of Concord tells you that Concord Corporation holds these investments with the intention of selling them in order to earn short-term profits from appreciation in their prices and accounts for them using the FV-NI model. Assume that Concord Corporation follows IFRS 9. Repeat the parts above, assuming the investments are accounted for using FV-OCI with no recycling. Concord's policy is to capitalize transaction costs on the acquisition of FV- OCI investments and reduce the proceeds on disposal. In addition, the company reclassifies any gains or losses on disposition to Retained Earnings. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter o for the amounts.) Date Account Titles and Explanation Debit Credit (a) Jan. 15 FV-OCI Investments 153489 Cash 153489 Apr. 17 FV-OCI Investments 133743 Cash 133743 Sep. 10 FV-OCI Investments 95502 Cash 95502 (b) May 20 FV-OCI Investments 51289 51289 Unrealized Gain or Loss (To adjust to fair value at date of disposal) May 20 Cash 51226 51226 FV-OCI Investments (To record disposal) May 20 Unrealized Gain or Loss 51289 51289 Retained Earnings (To reclassify holding gain) (c) Dec. 31 Unrealized Gain or Loss - FV-OCI Investments What is the amount that will be reported as other comprehensive income for the year ended December 31, 2020? Show the wording that would appear on the comprehensive income statement. (If an amount reduces the account balance then enter with negative sign.) Other Comprehensive Income Items that may not be reclassified subsequently to net income Fair value adjustment May 20 On Nirmala Corp. shares sold 51226 Year end fair value adjustment for portfolio 188008 Holding losses arising during the year Total What will be the balance in Accumulated Other Comprehensive Income on December 31, 2020? (If an amount reduces the account balance then enter with negative sign.) Balance of Accumulated Other Comprehensive Income: Beginning balance Other comprehensive income for 2020 V Less Reclassification adjustment Ending balance December 31, 2020
