Answered step by step
Verified Expert Solution
Question
1 Approved Answer
On 1 July 2019 Gerringong Ltd purchased the following instruments: 100 000 shares in Gerroa Ltd for a price of $5.00 per share. Brokerage costs
On 1 July 2019 Gerringong Ltd purchased the following instruments: 100 000 shares in Gerroa Ltd for a price of $5.00 per share. Brokerage costs on the purchase were $200. At 30 June 2020 the share price of Gerroa Ltd was $4.50. Gerringong has elected to classify the share investment at fair value through other comprehensive income. 20 000 call options in Kiama Ltd. These call options give Gerringong Ltd the right to purchase 20 000 shares in Kiama Ltd. The options were purchased for $0.50 each and had a fair value at 30 June 2020 of $0.65. The options were purchased for speculative purposes. There were no transaction costs. The net impact on profit of the above for the year ended 30 June 2020 is: Select one: a. a net credit of $3,000 O b. a net debit of $47,000 O C. a net debit of $47,200 x O d. a net debit of $200 Oe. a net credit of $2,800
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started