Question
On 1 November 20X8, Porter Company acquired the following FVTPL investments: Minto Corp.3,700 common shares at $15 cash per share Pugwash Corp.850 preferred shares at
On 1 November 20X8, Porter Company acquired the following FVTPL investments:
- Minto Corp.3,700 common shares at $15 cash per share
- Pugwash Corp.850 preferred shares at $25 cash per share
The annual reporting period ends 31 December. Quoted fair values on 31 December 20X8 were as follows:
- Minto Corporation common, $13
- Pugwash Corporation preferred, $28
The following information relates to 20X9:
2 March | Received cash dividends per share as follows: Minto Corporation, $2.10; and Pugwash Corporation, $1.20. |
1 October | Sold 220 shares of Pugwash Corporation preferred at $31 per share. |
31 December | Fair values were as follows: Minto common, $21, and Pugwash preferred, $27. |
Required: 1. Prepare the entry for Porter Company to record the purchase of the securities. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
. 1. Record the acquisition of investment. Nov 1, 2008 (general journal)
2. Prepare the adjusting entries needed at the end of 20X8. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) 1. Record the holding loss/gain on Pugwash Co. Shares. 31 Dec 2008
2. Record the holding loss/gain on Minto Co. Shares. 31 Dec 2008
3. Show the amount that would be reported in 20X8 earnings and the asset amounts on the statement of financial position.
|
4. Prepare the all entries required in 20X9. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
- Record the dividends received. 2 Mar 2009
- Record the sale of 200 shares of Pugwash stock. 1 Oct 2009
- Record the adjusting entry to record fair value of Mint Co. shares. 31 Dec 2009
- Record the adjusting entry to record fair value of Pugwash Co. shares. 31 Dec 2009
5. Show the amount that would be reported in 20X9 earnings and the asset amounts on the statement of financial position.
|
6. Repeat part (5), assuming that both the investments were originally designated FVOCI-Equity investments. Include the balance of the AOCI equity reserve for holding gain/loss for the SFP amounts. The holding gain/loss amounts are not reclassified after realization.
|
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