Question

QUESTION 27

1. Manitoba Ltd. Purchased 1,000 shares of Spectrum Company for $20 per share on January 1 Year 1. Manitobal chose to classify this equity investment as FVOCI. On December 31, Year 1, the market price of Spectrum’s stock was $23. On March 1, Year 2, all 1,000 shares of Spectrum’s stock were sold for $24 per share.

   Under IFRS, on December 31, Year 1, the journal entry for this equity investment would include:

   	A.	A credit to Other comprehensive income for $3,000.
   	B.	A credit to Unrealized gain(I/S) for $3,000.
   	C.	A debit to Other comprehensive income for $3,000.
   	D.	A credit to Other comprehensive income for $1,000

QUESTION 28

1. Manitoba Ltd. Purchased 1,000 shares of Spectrum Company for $20 per share on January 1 Year 1. Manitobal chose to classify this equity investment as FVOCI. On December 31, Year 1, the market price of Spectrum’s stock was $23. On March 1, Year 2, all 1,000 shares of Spectrum’s stock were sold for $24 per share.

   Under IFRS, on March 1, Year 2, the journal entry for the sale of this equity investment would include:

   	A.	A debit to Other comprehensive income for $1,000.
   	B.	A credit to Gains on sale of equity investment for $4,000
   	C.	A credit to Other comprehensive income for $1,000.
   	D.	A credit to Gains on sale of equity investment for $1,000