B. Barrow Limited has the following investment portfolio on 31 December 2020 Company A Limited C Limited D Limited Date

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B Barrow Limited Has The Following Investment Portfolio On 31 December 2020 Company A Limited C Limited D Limited Date 1 (245.24 KiB) Viewed 34 times

B. Barrow Limited has the following investment portfolio on 31 December 2020 Company A Limited C Limited D Limited Date of purchase 1 Jan 2020 1 Apr 2020 1 May 2020 No. of shares 1,800 1,500 2,000 Unit cost ($) 12 20 16 Total amount Total cost ($) 21,600 30,000 32,000 83,600 Fair values of these three investments were $87,000 on 31 December 2020. In 2021, Barrow Limited had incurred the following two transactions: 1. On 16 January 2021, sold 1,800 ordinary shares of A Limited at $15 per share. 2. On 11 February 2021, purchased 1,000 ordinary shares of E Limited at $18 per share plus commission fees of $300. On 31 December 2021, the fair values per share of C Limited was $22, D Limited was $12 and E Limited was $17. Barrow Limited classifies all equity investments as trading. Required: (Round all amounts to the nearest dollar.) (a) Prepare the adjusting journal entry for the investment portfolio on 31 December 2020. (2 marks) (b) Prepare the journal entries to record the sale on 16 January 2021 and the purchase on 11 February 2021. (6 marks) (c) Calculate the unrealized gains or losses and prepare the adjusting journal entry for the investment portfolio on 31 December 2021. (2 marks) (d) Explain the different classification of trading equity investment and non-trading equity investment in the statement of financial position. (2 marks)