The following information relates to the investments classified at fair value th
ID: 2340930 • Letter: T
Question
The following information relates to the investments classified at fair value through profit and loss ("FVTPL) of Sinclair Corp Selling Price Acquisition Acquisition Date Market Value Dec. 31 2017 Cost Sold N/A NIA Security Date 2016 2018 N/A $125,000 $142,000 $150,000 Alpha Beta Delta Omega Jan. 3, 2018 $180,000 June 30, 2018 $210,000 N/A Apr. 13, 2016 $140,000 Aug. 24, 2016 $80,000 Jan. 8, 2017 $90,000 May 27, 2017 $105,000 $85,000 N/A NIA NIA NIA $73,000 $85,000 N/IA NIA The Sinclair Corp. closes its books on December 31 each year. ["NIA" means not applicable.] Required a. Prepare journal entries relating to these investments at fair value through profit and loss for each year. (There are NO brokerage fees.) b. Show how the information regarding these investments would be presented on the income statement and balance sheet for each year.Explanation / Answer
a…. Date Account Title Debit Credit 2016 13-Apr Investment-Alpha 140000 Cash 140000 24-Aug Investment-Beta 80000 Cash 80000 Unrealised holding period loss-Alpha 15000 FVTPL-Alpha 15000 (140000-125000) FVTPL-Beta 5000 Unrealised holding period gain-Beta 5000 (85000-80000) 2017 8-Jan Investment-Delta 90000 Cash 90000 FVTPL-Alpha 17000 Unrealised holding period gain-Alpha 17000 (142000-125000) 27-May Cash 105000 Investment-Beta 85000 Gain on sale of Beta 20000 Unrealised holding period loss-Delta 17000 FVTPL-Delta 17000 (90000-73000) 2018 3-Jan Investment-Omega 180000 Cash 180000 30-Jun Cash 210000 Investment-Omega 180000 Gain on sale ofOmega 30000 FVTPL-Alpha 8000 Unrealised holding period gain-Alpha 8000 (150000-142000) FVTPL-Delta 12000 Unrealised holding period gain-Delta 12000 (85000-73000) 879000 879000 b… Income Statement Balance Sheet 2016 2016 Unrealised holding period loss-Alpha 15000 Current assets Unrealised holding period gain-Beta 5000 Investment-Alpha 140000 FVTPL-Alpha -15000 125000 Investment-Beta 80000 FVTPL-Beta 5000 85000 2017 2017 Unrealised holding period gain-Alpha 17000 Current assets Gain on sale of Beta 20000 Investment-Alpha 125000 Unrealised holding period loss-Delta 17000 FVTPL-Alpha 17000 142000 Investment-Delta 90000 FVTPL-Delta -17000 73000 2018 2018 Gain on sale ofOmega 30000 Current assets Unrealised holding period gain-Alpha 8000 Investment-Alpha 142000 Unrealised holding period gain-Delta 12000 FVTPL-Alpha 8000 150000 Investment-Delta 73000 FVTPL-Delta 12000 85000
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