Chapter 4: Investments in Equity Securities

PROBLEMS

4-5.

a. Year
3
July Memorandum
Entry:
Received a 20% bonus of 6,000 ordinary shares from the previous
30,000 shares held.
(30,000*20% =
6,000)

Equity Investments at FV through OCI

237,50
0
Unrealized Gain or Loss on Equity
Investments - OCI 237,50
0
((15,000*70)-
((30,000*65)*15/36))

Cash (15,000*70)
1,050,0
00
Equity Investments at FV through
OCI 1,050,0
00

Unrealized Gain or Loss on Equity Investments -

OCI 300,00
0
Retained
Earnings 300,00
0

((150,000*15/36)+237,5
00)

Dec. Equity Investments at FV through OCI

31 374,50
0
Unrealized Gain or Loss on Equity
Investments - OCI 374,50
 0
((21,000*72)-
((30,000*65)*21/36))

b. None

c. Equity Investments at FV through OCI, Dec. 31, Year 3

(21,000*72) 1,512,0
00

d. Unrealized Gain or Loss on Equity Investments, Dec. 31,

Year 3
(237,000+150,000-
300,000+374,500) 462,00
0