Here is the question
Em lnc., accounts for its investments under IFRS No. 9 and purchased the following investments during December 2021: 1. One hundred and thirty of Donald Company's $1,000 bonds. The bonds pay semiannual interest, return principal in 10 years, and include no other cash ows or other features. Mplans to hold 20 of the bonds to collect contractual cash ows over the life of the investment and to hold 110, both to collect contractual cash ows but also to sell them if their price appreciates sufficiently. Subsequent to Mpurchase of the bonds, but prior to December 31, the fair value of the bonds increased to $1,040 per bond, and gm sold 20 of the 110 bonds. Wake sold 10 of the 20 bonds it had planned to hold to collect contractual cash ows over the life of the investment. The fair value of the bonds remained at $1,040 as of December 31, 2021. 2. $25,800 of Watson Company common stock. Mdoes not have the ability to signicantly inuence the operations of Watson. m elected to account for this equity investment at fair value through 0C1 [FVOCI]. Subsequent to Mpurchase of the stock, the fair value of the stock investment increased to $31,600 as of December 31, 2021. Required: 1. Indicate how WWould account for its investments when it acquired the Donald bonds and Watson stock. 2. For each of the following categories of Minvestments, calculate the effect of realized and unrealized gains and losses on Mnet income, other comprehensive income, and comprehensive income for the year ended December 31, 2021 : (a) any Donald bonds accounted for at amortized cost that were purchased and held at year end, (b) any Donald bonds accounted for at amortized cost that were purchased and sold, (0) any Donald bonds accounted for at FVOCI that were purchased and held at year end, (d) any Donald bonds accounted for at FVOCI that were purchased and sold, and (e) the Watson stock. Ignore interest revenue and taxes. Complete this question by entering your answers in the tabs below. Reg 1 Req 2A Req 2B Req 2C Req 2D Req 2E Indicate how Feherty would account for its investments when it acquired the Donald bonds and the Watson company stock. The Donald Company 20 bonds held to collect contractual cash flows Amortized cost The Donald Company 110 bonds held for trading purposes FVOC The Watson Company stock would be accounted for FVOCI Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 2C Req 2D Req 2E For any Donald bonds accounted for at amortized cost that were purchased and sold, calculate the effect of realized and unrealized gains and losses on Feherty's net income, other comprehensive income, and comprehensive income for the year ended December 31, 2021. Effect Net income Other comprehensive income Net effect on comprehensive income Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 2c Req 2D Req 2E For any Donald bonds accounted for at FVOCI that were purchased and held at year end, calculate the effect of realized and unrealized gains and losses on Feherty's net income, other comprehensive income, and comprehensive income for the year ended December 31, 2021 Effect Net income Other comprehensive income Net effect on comprehensive income Req 1 Req 2A Req 2B Req 2C Req 2D Req 2E For any Donald bonds accounted for at FVOCI that were purchased and sold, calculate the effect of realized and unrealized gains and losses on Feherty's net income, other comprehensive income, and comprehensive income for the year ended December 31, 2021. Effect Net income Other comprehensive income Net effect on comprehensive income Req 1 Req 2A Req 2B Req 2C Req 2D Req 2E For the Watson stock, calculate the effect of realized and unrealized gains and losses on Feherty's net income, other comprehensive income, and comprehensive income for the year ended December 31, 2021. Ignore interest revenue and taxes. Effect Net income Other comprehensive income Net effect on comprehensive income $ 10,600
