Question

On September 30, 20x6, Riches Inc. made three investments: 1455 shares of Wendle Inc., 4072 shares of Sam International, and 842 shares of Hinter Inc. The shares of Wendle Inc. and Hinter Inc. are classified as FVTPL and the shares of Sam International are classified as FVTOCI. The market price per share is as follows: Wendle Inc. Sam Hinter Inc. Sept. 30, x6 Dec. 31, x6 $12.33 $16.64 International $8.84 $5.27 $7.59 $4.06 What amount would be reported as profit for the year 20x6, assuming income before gains/losses on investments is $149702? Select one: O a. $153001 • b. $138464 O c. $0 O d. $3299 Check

Answer 1

Answer:

Amount of unrealised gain or (loss) on shares of Wendle Inc. = (16.64 - 12.33) * 1455

= 4.31 * 1455

= $6,271.05

Amount of unrealised gain or (loss) on shares of Sam International = (5.27- 8.84) * 4072

= -3.57* 4072

= $(14,537.04)

Amount of unrealised gain or (loss) on shares of Hinter Inc. = (4.06- 7.59) * 842

= -3.53* 842

= $(2972.26)

Amount to be included in Profit and Loss Account = $6271.05+ $(2972.26)

= $3,298.79

Amount to be included in Other Comprehensive Income Account = $(14,537.04)

Total comprehensive income is the combination of Profit and Loss Account and Other Comprehensive Income Account.

Amount of total comprehensive income before considering gains/losses on investments = $149,702

Amount of total comprehensive income after considering gains/losses on investments = 149,702+ 3,298.79+ (14,537.04)

= $138,464

Hence, the answer is B. $138,464.