Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 13: 11IFRS (page 658)

Use the information from IFRS17-10 but assume the shares were purchased to meet a non-trading regulatory requirements. Prepare Fairbanks' journal entries to record (a) the purchase of the investment, (b) the dividends received, and (c) the fair value adjustment.

Short Answer

Expert verified

Non-trading investment debited by $13,200 and cash credited by $13,200. Cash debited by $1,300 and dividend revenue credied by $1,300.

Step by step solution

01

Entry for purchase of investment

Date

Particulars

Debit

Credit



Non-Trading Investment

$13,200


Cash$13,200

(Being entry for the purchase of trading investment)

02

Entry for dividend revenue

Date

Particulars

Debit

Credit



Cash

$1,300


Dividend Revenue

$1,300

(Being entry for the dividend revenue)

03

Entry for fair value adjustment

In this, the investment is non-trading in nature which means the investment is held until maturity. Hence, no entry of the fair value adjustment is passed.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Should a liability be recorded for risk of loss due to lack of insurance coverage? Discuss.

Explain the accounting for an assurance-type warranty.

E13-5 (L01) (Adjusting Entry for Sales Tax) During the month of June, Rowling Boutique recorded cash sales of \(233,200 and credit sales of \)153,700, both of which include the 6% sales tax that must be remitted to the state by July 15.

Instructions

Prepare the adjusting entries that should be recorded to fairly present the June 30 financial statements.

Question: Explain how trading debt securities are accounted for and reported?

BE13-4 (L01) Sport Pro Magazine sold 12,000 annual subscriptions on August 1, 2017, for $18 each. Prepare Sport Pro’s August 1, 2017, journal entry and the December 31, 2017, annual adjusting entry, assuming the magazines are published and delivered monthly.
See all solutions

Recommended explanations on Business Studies Textbooks

Strategic Direction

Read Explanation

Business Development

Read Explanation

Intermediate Accounting

Read Explanation

Business Case Studies

Read Explanation

Organizational Communication

Read Explanation

Financial Performance

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free