Question
QUESTION 27 Manitoba Ltd. Purchased 1,000 shares of Spectrum Company for $20 per share on January 1 Year 1. Manitobal chose to classify this equity
QUESTION 27
-
Manitoba Ltd. Purchased 1,000 shares of Spectrum Company for $20 per share on January 1 Year 1. Manitobal chose to classify this equity investment as FVOCI. On December 31, Year 1, the market price of Spectrums stock was $23. On March 1, Year 2, all 1,000 shares of Spectrums stock were sold for $24 per share.
Under IFRS, on December 31, Year 1, the journal entry for this equity investment would include:
A. A credit to Other comprehensive income for $3,000.
B. A credit to Unrealized gain(I/S) for $3,000.
C. A debit to Other comprehensive income for $3,000.
D. A credit to Other comprehensive income for $1,000
QUESTION 28
-
Manitoba Ltd. Purchased 1,000 shares of Spectrum Company for $20 per share on January 1 Year 1. Manitobal chose to classify this equity investment as FVOCI. On December 31, Year 1, the market price of Spectrums stock was $23. On March 1, Year 2, all 1,000 shares of Spectrums stock were sold for $24 per share.
Under IFRS, on March 1, Year 2, the journal entry for the sale of this equity investment would include:
A. A debit to Other comprehensive income for $1,000.
B. A credit to Gains on sale of equity investment for $4,000
C. A credit to Other comprehensive income for $1,000.
D. A credit to Gains on sale of equity investment for $1,000
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