On January 1 2015 Sturge Enterprises Inc held the

following #8712
On January 1, 2015, Sturge Enterprises Inc. held the following debt and equity
investments:During the year, Sturge made the following purchases:There were no differences
between cost and fair value at January 1, 2015. The market prices of the various securities at
year end, December 31, 2015, were as follows: Ajax shares $6; Beta shares $9; and Citrus
bonds $107 (this means 107% of maturity value).Instructions(a) Calculate the cost and fair
value of Sturge Enterprises' investment portfolio at December 31.(b) If Sturge Enterprises
considers its entire portfolio to be trading investments and uses the fair value through profit or
loss model, at what value should these investments be reported on the statement of financial
position at December 31?At what amount, and where, should any unrealized gains or losses be
reported?(c) If Sturge Enterprises intends to hold the Citrus bonds until they mature and uses
the amortized cost model, at what value should these bonds be reported on the statement of
financial position at December 31? At what amount, and where, should any unrealized gains or
losses on the bonds be reported?(d) If all of the investments held by Sturge Enterprises related
to private companies and no fair value information related to these securities could be obtained,
what would be the impact on the income statement and on the statement of financial
position?View Solution:
On January 1 2015 Sturge Enterprises Inc held the following

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