Question

Problem 1 The Cooper Corporation has the following investments in the shares of other corporations as at December 31, 20x3: Company Marcus Corp. Andy Inc. Rory Company Original Cost $260,000 310,000 95,000 $665,000 Carrying Value $230,000 340,000 88,000 $658,000 Fair Value $191,000 374,000 95,000 $660,000 The following transactions occurred during 20x4: Marcus was sold for $185,000 less $8,200 of brokerage fees Rory was sold for $102,000 less $3,200 of brokerage fees Bankley Corp shares were purchased for $340,000 plus $6,700 of brokerage fees At the end of the year, the fair value of Andy and Bankley was $410,000 and $280,000 respectively Required - a) Prepare all journal entries for the year assuming that the share are classified as: FVTPL b) FVTOCI. The net income for the year is $1,210,000. Prepare the bottom part of the statement of comprehensive income. Reconcile the opening balance in the A'OCI account to the ending balance.

Answer 1

98,800 7,000 98,800 7,000 A) FVTOCI Cash (102000-3200) Unrealized gain in other comprehensive income Investment in the shares of Rory Company Gain on sale of investment (Sale of shares of Rory company) B) FVTPL Cash (102000-3200) Unrealized gain in other comprehensive income Investment in the shares of Rory Company Gain on sale of investment (Sale of shares of Rory company) 95,000 10,800 95,000 10,800 1,76,800 53,200 1,76,800 53,200 Cash (185000-8200) Loss on sale of investment Investment in the shares of Marcus Corp. Fair value loss (230000-191000) (Sale of shares of Marcus Corp.) 1,91,000 39,000 Cash (185000-8200) Loss on sale of investment Investment in the shares of Marcus Corp. Fair value loss (230000-191000) (Sale of shares of Marcus Corp.) 1,91,000 39,000 3,46,700 Investment in the shares of Bankley Corp. Cash (Purchase of Bankley Corp shares) 3,40,000 6,700 3,46,700 Investment in the shares of Bankley Corp. Brokerage fees Cash (Purchase of Bankley Corp shares) 3,46,700 66,700 Fair value loss Investment in the shares of Bankley Corp. (Change in the fair value of shares of Bankley Corp.) 66,700 60,000 Statement of profit or loss Investment in the shares of Bankley Corp. 60,000 36,000 36,000 Investment in the shares of Andy Inc. Fair value gain Investment in the shares of Andy Inc. Statement of profit or loss 36,000 36,000

6,700 Statement of profit or loss Brokerage fees 36,000 26 Fair value gain 27 Other comprehensive income 6,700 36,000 28 29 Other comprehensive income 30 Fair value loss 66,700 66,700 31 12,10,000 32 33 STATEMENT OF COMPREHENSIVE INCOME 34 35 Net profit for the year 36 Other comprehensive income 37 Unrealized gain on sale of shares of Rory Company 38 Fair value gain on the shares of Andy Inc. 39 Fair value loss on the shares of Bankley Corp. 40 Fair value loss on the sale of shares of Marcus Corp. 41 Other comprehensive income 42 Total comprehensive income 43 7000 36,000 -66,700 -39,000 -62,700 11,47,300