investment

Question 2 (10 marks): Compulsory the course of your examination of the financial statements of XYZ Corporation for the year ended ber 31, 2016, you found a new account, "Investments." Your examination revealed that during YZ began a program of investments, and all investment-related transactions were entered in this t. Your analysis of this account for 2016 follows: XYZ Corporation T Analysis of Investments For the Year Ended December 31, 2016 S Debit O 2016 Credit ABC Company Ordinary Shares 14 Purchased 8,800 shares @ $33 per share. $484,000 26 Received 1,200 ordinary shares of ABC Company as a share dividend. (Memorandum entry in general ledger) Sold the 300 ordinary shares of ABC Company received July 26 @ $60 per share. $30,000 HARE Debit Credit EFG Inc., Ordinary Shares 30 Purchased 20,000 shares @ $40 per share. $800.000 28 Received dividend of $1.30 per share. $30.000 ional information: he fair value for each security as of December 31, 2016 was as follows: cunty December 31 BC Co. $74 FG Inc. 32 YZ Corp. 35 all of the investments of XYZ are less than 20%% Each investment is considered by XYZ management to be non-trading tired: XYZ Corporation: Indicate whether (1) the Equity investments, and (2) Net Income balances are understated or overstated and by how much as a result of the information related to investments in (a) and () schedules above Prepare the entry, if necessary, to record the proper valuation of the non-trading equity investment portfolio as of December 31, 2016. Assume that the fair value adjustment account has zero beginning balance