Feherty, Inc., accounts for its investments under IFRS No. 9 and purchased the following investments during December 2021 1. One hundred and ninety of Donald Company's $1,000 bonds. The bonds pay semiannual interest, return principal in 8 years, and include no other cash flows or other features, Feherty plans to hold 60 of the bonds to collect contractual cash flows over the life of the investment and to hold 130, both to collect contractual cash flows but also to sell them if their price appreciates sufficiently. Subsequent to Feherty's purchase of the bonds, but prior to December 31, the fair value of the bonds increased to $1,020 per bond, and Feherty sold 60 of the 130 bonds. Feherty also sold 30 of the 60 bonds it had planned to hold to collect contractual cash flows over the life of the investment. The fair value of the bonds remained at $1,020 as of December 31, 2021. 2. $26,400 of Watson Company common stock. Feherty does not have the ability to significantly influence the operations of Watson. Feherty elected to account for this equity investment at fair value through OCH (FVOCI). Subsequent to Feherty's purchase of the stock, the fair value of the stock investment increased to $32,800 as of December 31, 2021. Required: 1. Indicate how Feherty would account for its investments when it acquired the Donald bonds and Watson stock. 2. For each of the following categories of Feherty's investments, calculate the effect of realized and unrealized gains and losses on Feherty's net income, other comprehensive income, and comprehensive income for the year ended December 31, 2021 (a) any Donald bonds accounted for at amortized cost that were purchased and held at year end. (b) any Donald bonds accounted for at amortized cost that were purchased and sold. (c) any Donald bonds accounted for at FVOCI that were purchased and held at year end, (d) any Donald bonds accounted for at FVOCI that were purchased and sold, and le) the Watson stock. Ignore interest revenue and taxes. Complete this question by entering your answers in the tabs below. Reg 271 Req 1 Req 28 Req 2C Req 2E Req 2D For any Donald bonds accounted for at amortized cost that were purchased and held at year end, calculate the effect of realized and unrealized gains and losses on Feherty's net income, other comprehensive income, and comprehensive income for the year ended December 31, 2021. Effect Net income Other comprehensive income Net effect on comprehensive income Feherty, Inc., accounts for its investments under IFRS No. 9 and purchased the following investments during December 2021 1. One hundred and ninety of Donald Company's $1,000 bonds. The bonds pay semiannual interest, return principal in 8 years, and include no other cash flows or other features, Feherty plans to hold 60 of the bonds to collect contractual cash flows over the life of the investment and to hold 130, both to collect contractual cash flows but also to sell them if their price appreciates sufficiently. Subsequent to Feherty's purchase of the bonds, but prior to December 31, the fair value of the bonds increased to $1,020 per bond, and Feherty sold 60 of the 130 bonds. Feherty also sold 30 of the 60 bonds it had planned to hold to collect contractual cash flows over the life of the investment. The fair value of the bonds remained at $1,020 as of December 31, 2021. 2. $26,400 of Watson Company common stock. Feherty does not have the ability to significantly influence the operations of Watson. Feherty elected to account for this equity investment at fair value through OCH (FVOCI). Subsequent to Feherty's purchase of the stock, the fair value of the stock investment increased to $32,800 as of December 31, 2021. Required: 1. Indicate how Feherty would account for its investments when it acquired the Donald bonds and Watson stock. 2. For each of the following categories of Feherty's investments, calculate the effect of realized and unrealized gains and losses on Feherty's net income, other comprehensive income, and comprehensive income for the year ended December 31, 2021 (a) any Donald bonds accounted for at amortized cost that were purchased and held at year end. (b) any Donald bonds accounted for at amortized cost that were purchased and sold. (c) any Donald bonds accounted for at FVOCI that were purchased and held at year end, (d) any Donald bonds accounted for at FVOCI that were purchased and sold, and le) the Watson stock. Ignore interest revenue and taxes. Complete this question by entering your answers in the tabs below. Reg 271 Req 1 Req 28 Req 2C Req 2E Req 2D For any Donald bonds accounted for at amortized cost that were purchased and held at year end, calculate the effect of realized and unrealized gains and losses on Feherty's net income, other comprehensive income, and comprehensive income for the year ended December 31, 2021. Effect Net income Other comprehensive income Net effect on comprehensive income
