Question

Question 6 of 7 < > -11 View Policies Current Attempt in Progress The following was reported by Church Financial in its December 31, 2021, financial statements: Investments at FVTPL, December 31, 2020 $13,000 Investments at FVTPL, December 31, 2021 17,700 Investment Income or (Loss) (500) Additional information: 1. The investments at FVTPL are investments in equity securities held for trading purposes. 2. Investment income or loss consists of: holding gain on the FVTPL investments of $3,000, and loss on sale of the FVTPL investments of $3.500. 3. The carrying amount of the FVTPL investment sold was $4,700. What is the cash amount received on the sale of the investment? Address O

Answer 1

Note: Purchase of FVTPL investment: Ending Investment in FVTPL Securities Less: Beginning Investment Add: Carrying Value of investment Sold Less: fair value gain Purchase of FVTPL investment $ 17,700 $ 13,000 4,700 3,000 6,400 $ $ $ Calculation of Cash received on Sale of investment: Carrying Value of Investment Less: Loss on Sale Cash received $ $ 4,700 3,500 1,200 $ $ 1,200 Solutions: Cash amount received on sale of investment is Journal entry on Sale of investment Date Accounts Dec-31 Cash Investment income or loss Investment as FVTPL (To record Sale of investment) Credit Debit $ 1,200 3,500 $ $ 4,700 $ 3,000 Dec-31 Investment as FVTPL Investment income or loss (to record fair value adjustment) $ 3,000

Investment at FVTPL Date Balance - Dr Balance - Cr 31-Dec-20 $ 13,000 $ 13,000 31-Dec-21 $ 4,700 $ 8,300 31-Dec-21 $ 6,400 $ 14,700 31-Dec-21 $ 3,000 $17,700 (Beginning Balance) (Sale) (Purchase) (Fair Value Adjustment) Investment Purchased $ 6,400 Credit Debit $ 6,400 Date Accounts Dec-31 Investment as FVTPL Cash (to record purchase of investment) $ 6,400