FE16(7 Marks)

During its 2019 fiscal year, Farewell Inc. derecognized two investments in financial assets, details of which follow:

An investment classified as FVPL sold for its fair value of $280,000; the carrying value of the investment was $290,000.

An investment in a debt security classified as FVOCI sold for its fair value of $406,000; the carrying value of the investment was $392,000 and the credit balance in AOCI pertaining to this investment was $20,000.

Required: Prepare the journal entries for Farewell to account for the following:

a) Derecognizing the investment at FVPL

b) Updating the investment at FVOCI to fair value immediately prior to derecognition

c) Derecognizing the investment at FVOCI

FE17 (8 Marks)

On October 1, 2021, a Canadian firm sold and delivered merchandise to an Indian company for 250,000,000 rupees (INR). The terms of the invoice were net 90 days. The Canadian firm's year end is November 30, 2021.

The following exchange rates are available:

October 1, 2021 90-day forward rate INR 1 = C$0.0180

October 1, 2021 Spot rate INR 1 = C$0.0200

November 30, 2021 Spot rate INR 1 = C$0.0185

November 30, 2021 30-day forward rate INR 1 = C$0.0175

December 30, 2021 Spot rate INR 1 = C$0.0177 Required:

Prepare journal entries to record the events for each of the following independent situations:

a) No forward contract is taken out to offset the receivable, and the customer pays in 90 days on December 30, 2021.

b) A 90-day forward contract is taken out on October 1, 2021, and the customer pays in 90 days on December 30, 2021.

FE18 (10 Marks)

RDC Ltd. has a number of contracts in progress at its fiscal year end of May 31, 2020. Details of two of these contracts follow:

Contract 1 Contract 2

Contract price $16,000 $36,000

Progress billings invoiced 6,300 21,400

Progress billings received 4,850 20,000

Costs incurred to date 4,300 24,800

Estimated costs to complete 10,100 13,200

Both contracts were started in the current fiscal year. Costs incurred to date are regarded as recoverable. All costs and outstanding billings invoiced are regarded as recoverable.

The customer controls the asset being constructed under Contract 1. For Contract 2, RDC controls the asset as it is being constructed; title is transferred when construction is fully completed.

The company measures the progress to completion on contracts using an input method based on costs incurred.

Required: Calculate the amounts to appear in the statement of comprehensive income of RDC for the year to May 31, 2020, and the statement of financial position as at that date (disclosure notes are not required).