ABC Corp has excess cash to invest and wants to buy shares of XYZ Inc to profit from the changes in their value. The company follows IFRS and will account for its investment in XYZ Inc using the FV-NI method and has a December 31 year end. The share price of XYZ Inc was $58.47 on March 1, $49.67 on September 15, and $54.05 on December 31. ABC Corp purchased 58,405 shares of XYZ Inc on March 1 and sold 37,201 of them on September 15. It still owned the remaining shares on December 31. The company paid a per-share commission fee of 1.67% of the share price on the day of buying or selling the shares. Assuming the company record all investment income, gains, fees, and losses in one account, how much net investment income or loss was recorded during the year on its investment in the shares of XYZ Inc?
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- ABC Corp has excess cash to invest and wants to buy shares of XYZ Inc to profit from the changes in their value. The company follows IFRS and will account for its investment in XYZ Inc using the FV-NI method and has a December 31 year end. The share price of XYZ Inc was $68.13 on March 1, $57.89 on September 15, and $62.99 on December 31. ABC Corp purchased 50,683 shares of XYZ Inc on March 1 and sold 32,269 of them on September 15. It still owned the remaining shares on December 31. The company paid a per-share commission fee of 2.03% of the share price on the day of buying or selling the shares. Assuming the company record all investment income, gains, fees, and losses in one account, how much net investment income or loss was recorded during the year on its investment in the shares of XYZ Inc?On January 1, 2021, X Inc. purchased 25% of the voting shares of Y Inc. However, due to a system crash, the initial amount of consideration paid for this 25% has been lost. X uses the equity method. X has significant influence over Y. Calculate the Value of the initial purchase X Inc. paid for its 25% ownership (i.e. January 1, 2021), given the following information that you were able to find: Value of the Investment account in Y Inc. at the end of 2023 was $97,000 Y's net income and declared dividends for the following three years are as follows: Net Income (loss) Dividends 2021 $50,000 $20,000 2022 $70,000 $80,000 2023 $30,000 $60,000On January 1, 2020, Alice Company purchased 40,000 shares of Jasper at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000. A P5 dividend per share of Jasper had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. No other transactions occurred in 2020 affecting the investment in Jasper's share. What is the initial measurement of the investment?
- On June 15, 2020, Brainiac Company purchased 8 shares of Lovely Company for $6 per share. The investment represented less than 20% of the shares outstanding so it was a passive investment. Brainiac held the investment for the remainder of 2020, and at December 31 the market value was $4 per share. During 2021, Whiz sold 3 shares of Lovely for $7 each and at the end of 2021, the market value of the remaining 5 shares was $9 each. What was the gain or loss on the 2020 income statement? Select one: a. $16 unrealized loss b. $16 realized loss c. $16 realized gain d. $16 unrealized gainOn June 15, 2020, Brainiac Company purchased 8 shares of Lovely Company for $6 per share. The investment represented less than 20% of the shares outstanding so it was a passive investment. Brainiac held the investment for the remainder of 2020, and at December 31 the market value was $4 per share. During 2021, Brainiac sold 3 shares of Lovely for $7 each and at the end of 2021, the market value of the remaining 5 shares was $9 each. What was the gain or loss on Brainiac's income statement for 2021? Indicate how much of the gain or loss is realized and how much is unrealized. Select one: a. $9 realized gain and $25 unrealized gain b. $3 realized gain and $15 unrealized gain c. $3 realized gain and $25 unrealized gain d. $9 realized gain and $15 unrealized gainOn April 15, 2023, Rizzo Inc. purchased 34,500 shares of Hernandez, Inc. for $22 per share (passive interest). During the year Rizzo Inc. sold 4,500 shares of Hernandez, Inc. for $25 per share. Rizzo Inc. started operations on January 1, 2023. At December 31, 2023 the market price of Hernandez, Inc.’s stock was $19 per share. What is the total amount of unrealized gain (loss) that Rizzo Inc. will report through its income statement for the year ended December 31, 2023 related to its investment in Hernandez, Inc. stock?
- Blue Spruce Corporation purchased 300 common shares of Burke Inc. for $22,830 and accounted for them using FV-OCI. During the year, Burke paid a cash dividend of $3.45 per share. At year end, Burke shares had a fair value of $72.50 per share. (a) Prepare Blue Spruce's journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Account Titles and Explanation Debit CreditMarigold Corporation purchased 630 common shares of Ditch Inc. for $12,900 on February 21. Marigold paid a 1% commission on the share purchase and, because the shares were not publicly traded, decided to account for them following the cost model. On June 30, Ditch declared and paid a cash dividend of $1.90 per share. (a) Prepare Marigold Corporation's journal entry to record the purchase of the investment. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List debit entry before credit entry.) Date Account Titles and Explanation Feb. 21 Debit CreditOn January 2, 2022, Promenade Company purchased 25% of Twilight Company's ordinary shares; no goodwill resulted from the purchase. Promenade appropriately carries this investment at equity and the balance in Twilight's investment account was P3,800,000 at December 31, 2022. Twilight reported net income of P2,400,000 for the year and paid dividends amounting to P960,000 during 2022. How much did Promenade pay for its investment in Twilight?
- Early in its 2023 fiscal year (December 31 year end). Whispering Winds Company purchased 10,700 Kenyon Corporation common shares for $26.18 per share, plus $1,800 in brokerage commissions. These securities were accounted for at FV-OCI (with no recycling). and transaction costs were capitalized. In September, Kenyon declared and paid a dividend of $1.02 per share, and on December 31. 2023, the fair value of these shares was $290,505. On April 13, 2024, Whispering Winds sold all the Kenyon shares at a price of $28.10 each, incurring $1.925 in brokerage commissions on the sale. (a) Prepare the entry to record the purchase of the Kenyon shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry for the account titles and enter 0 for the amounts. List debit entry before credit entry) Account Titles and Explanation Debit CreditOn March 1, 2020 K.K. Corporation purchased 2,000 shares of Potter Wholesale for $35 per share. Based on the percentage of outstanding stock purchased, K.K. Corporation uses the fair value method to account for the investment. On December 31, 2020 the shares of Potter Wholesale had a current market value of $32 per share. What amount of realized gain or loss would K.K. Corporation report on its 2021 income statement if K.K. corporation sells the 2,000 shares of Potter Wholesale on July 1, 2021 for $34 per share? O $4,000 gain O $4,000 loss O $2,000 gain $2,000 loss O $1,000 lossPanthers Corp. purchased 16,000 shares of Canes Corp. for $10 per share on April 1, 2022. As per IFRS 9, Panthers chose to classify this new investment as FVOCI at the time of the purchase. On November 1, 2022 Canes paid a dividend of $6 per share. At balance sheet date the market price of Canes was $9 per share. On March 1, 2023 Panthers sold all 16,000 shares for $15 per share. 1) Prepare the journal entries required under IFRS as well as those that would be required under GAAP.