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Question Ding Ding Company has the following investments in its porrfitio ce the year-end deste 31 December 2018 10% bonds mature on January 2023 (Notel)

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Question Ding Ding Company has the following investments in its porrfitio ce the year-end deste 31 December 2018 10% bonds mature on January 2023 (Notel) 20,000 ordinary shares of Triple Corporation (Note 2) 15.000 ordinary shares of Tangible Corporation (Note 3) Cost Caring Fair ament (5) Value (5) 937.903 950.000 80,000 0.000 120.000 100.000 Note 1 On 1 January 2018, Ding Ding Company purchased 10% bonds, having a maturity value of $1,000,000, for $926,399 The maturity date is 1 January 2004 The bonds provide the bondholders with a 12% yield, with interest receivable on 1 January and 1 July of each year (starting from 1 July 2018). Ding Ding intends to hold these bonds to collect contractual cash flows and not for trading On 31 December 2019, the fair value of the bonds is $980,000 Note? In mid-June, the company sold all the shares of Triple Corporation fee $26.000. The commision and fees related to the transaction were $2,500 Due to the high dividend policy, the equity investment in Tangible Corporation was treated as not for trading On 30 June and 31 December 2019, Tangible Corporation pasd $3 d 55 dividends per share respectively Additional Information On 1 January 2019, Ding Ding acquired a 30% interest in Teawood Company for $500,000 A the date of purchase, the book value of net assets of Tcawood was St.200,000 The book values and fair values for all statement of financial position items were the same except for the plant facilities. The estimated useful life of the plant facilities is 10 years. During 2019. Terwood's reported net income was $150,000 and the company also paid cash dividends far 590,000 Page 5 of 11 Question 2 (continued The fair value of the investments on 31 December 2019 are shown as below: Question 2 (continued) The fair value of the investments on 31 December 2019 are shown as below: 12% bonds, mature at 1 January 2023 Ordinary shares of Tangible Corporation Ordinary shares of Teawood Company Fair Value (S) 940,000 150,000 560,000 Required: (a) Prepare all relevant journal entries to record the investments for the financial year of 2019. (27 marks) (b) Prepare the extracted statement of financial position showing the relevant accounts regarding the above investments as at 31 December 2019. (8 marks)

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