Topic 6 Solutions - Aug 9 Investment in FVTPL Cash(300 x $36 24 Cash(100 x $30 Investment in FVTPL Gain on Sale of FVTPL 10,800 10,800 3,000 2,800

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6 Aug. 9 Investment in FVTPL 10,800 Cash (300 x $36) 10,800 24 Cash (100 x $30) 3,000 Investment in FVTPL 2,800 Gain on Sale of FVTPL 200 Sept. 17 Investment in FVTPL 11,000 Cash (500 x $22) 11,000 30 Unrealized Loss on FVTPL 350 Investment in FVTPL 350 * * Security Cost 30/9/07 Fair Value Cumulative Change in Fair Value $ $ $ 300 ordinary shares in P Company 10,800 10,950 150 500 ordinary shares in U Company 11,000 10,500 (500 ) 21,800 21,450 (350 ) (For FVTPL, the direct method is more convenient.) (b) $ Dividend revenue 150 Loss on sale of FVTPL (600) Gain on sale of FVTPL 200 Unrealized loss on FVTPL (350) (c) Current Assets Financial Assets at Fair Value Through Profit or Loss $21,450
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7 Question 4 (1) (a) Reynolds original purchase 3,000 shares bonus shares 300 shares total holding 3,300 shares Total cost of $165,000 ÷ Total shares of 3,300 = $50 cost per share Sold 300 shares Dr ($) Cr ($) Correct entry: Cash (300 × $70) 21,000 Available-for-Sale Investments 15,000 Gain on Sale of Investments 6,000 Entry made: Cash 21,000 Available-for-Sale Investments 21,000 Correction: Available-for-Sale Investments 6,000 Gain on Sale of Investments 6,000 (b) Unruh should record cash dividend as dividend income. Correct entry:
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This note was uploaded on 10/20/2010 for the course AD abc123 taught by Professor Cat during the Summer '09 term at City University of Hong Kong.

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Topic 6 Solutions - Aug 9 Investment in FVTPL Cash(300 x $36 24 Cash(100 x $30 Investment in FVTPL Gain on Sale of FVTPL 10,800 10,800 3,000 2,800

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