Question

On September 30, 20x6, Riches Inc: made three investments: 1273 shares of Wendle Inc., 4134 shares of Sam International, and 808 shares of Hinter Inc. The shares of Wendle Inc. and Hinter Inc. are classified as FVTPL. and the shares of Sam International are classified as FVTOCI. The market price per share is as follows: Wendle Inc Sam Hinter hanc International Sept. 30, x6 $12.94 Dec. 31, x6 $16.35 $8.91 $5.80 57.46 54.31 Select one: a. $1796 b. $171209 What amount would be reported as profit for the year 20x6, assuming income before gains losses on investments is S1694132 , $o d. 5158352 Check

Answer 1

Solution:

Unrealized holding gain (Loss) on Wendle and hinter Inc. = ($16.35 - $12.94) * 1273 + (4.31 - $7.46) * 808 = $4,341 - $2,545 = $1,796

Amount would be reported as profit for 20X6 = Income before gain/losses on investment - Unrealized holding loss of FVTPL investment

= $169,413 + $1,796 = $171,209

Hence option b is correct.