Question

During the year ended December 31, 2018, and in the following months of January and February 2019, Pembina Inc. had the following transactions pertaining to its held for trading investments:

Apr.	1		Purchased 2,000 Starr Corporation $5, preferred shares for $206,000 cash.
July	1		Received quarterly cash dividend.
	2		Sold 500 Starr shares for $58,500 cash.
Oct.	1		Received quarterly cash dividend.
Nov.	22		Starr declared the quarterly dividend on November 22, to preferred shareholders of record on December 15, payable on January 1.
Dec.	31		Starr’s shares were trading at $118 per share.
Jan.	31		Due to an urgent need for cash, 700 Starr Corporation shares were sold despite a drop in the share price to $87 per share.
Feb.	15		Pembina sold an additional 500 Starr shares after the market recovered to $120 per share.

Record the above transactions, using the fair value through profit or loss model. Prepare any required adjusting entries at December 31. (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.)

How many Starr shares does Pembina own after the sale of shares on February 15, 2019? What are the cost and fair value of its investment on this date?

Number of shares		enter the number of shares
Cost		$enter the cost of investment in dollars
Fair Value		$enter the fair value in dollars

Answer 1

Answer"- Credit Date Apr. Particulars Debit Trending investment in preferred Stock +4206,000 stail Corporation Cash (Being to record purchase of 2.000 Preferred shares in Starr corporation by Cash) $206.000 July 1 Cash $10,000 $10,000 Dividends Revenue (2000 shares x $5) (Being to reord the receipt of dividendson Deferred Shares July, 2 Cash $ 58,506 $$1,500 Trending investment in preferred stock -stam corporation) (206,000/2,000 = $ (03X500 shares) Gain on sale of Trading investment ($58,500 - $51,500) (Being to record the sale of Preferred shares with gain) $7,000 loctil $7,500 $7,500 Cath Dividends revenue (0000 shares - 500 shares = 1500 sharesx$5) (Being to read the receipt of dividends on preferred shares) NOV. 22 No entry will be palled in the books of permbina Inc. for declaring divit my | by starr corporation)

Dec.31 $22,500 | Jan. 3) Trading investment in preferred stock-starr $28,500 Corporation ($118 - $103= $15x11500 shares) fair valve adjustment on Tradingimustment (Being to reard the increase in the value of Trading investment) Cash (700 shares x $87) $60,900 Loss on sale of Trading investment $21,700 ($118 - $87 = $ 31X 700 Shares) Trading investment in preferred stock- starr Grporation ( 700 sharezx5/18) (Being to record the sale of 700 preferred shares with less on fair value) Cath (soo sharex $120 $60,000 Trading investment in preferred stok- start Gorporation (#18 Slavey x 500 share) Geain on sale of Trading investment (Being to record the sale of soo preferred $ 82,600 feb.is $59,000 $ 1000 shares with gain) SOO 700 bi Total shares purchased 2,000 Less: sale on July a less sale on Jan 31 Less: sale on Feb 15 Number of shares after feb. 15 Gost ( 300 shares X$603 as calculated abog $ 30,900 Fair valve (300 shares X$120) $36.000 500 200