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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.

Earnings, 20X8:
Statement of financial position, 31 December 20X8:
FVTPL investments, at fair value

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.

Earnings, 20X9:
$0
Statement of financial position, 31 December 20X9:
FVTPL investments, at fair value

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.

Earnings, 20X9:
Investment revenue
Statement of financial position, 31 December 20x9:
FVTOCI investments, at fair value
Other comprehensive income (loss)

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