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The investments through profit or loss are those held at 31 March 2015 (after the sale below). They are carried at their fair value as at 1 April 2014, however, they had a fair value of $6·5 million on 31 March 2015. During the year an investment which had a carrying amount of $1.4 million was sold for $1.6 million. Investment income in the trial balance above includes the profit on the sale of the investment and dividends received during
the year.Investment income as at 31 March 2015 Trial Balance is $500,000
Investments through profit or loss – value at 1 April 2014 as at 31 March 2015 Trial Balance is 6,000The investment income should be:
Dividends received (500 – 200 profit on sale) 300 + Profit on sale 200 + Gains on fair value (6,500 – 6,000) 500 = 1000 Investment incomeHowever, if the above question change to
The investments through profit or loss are those held at 31 March 2015 (after the sale below). They are carried at their fair value as at 1 April 2014, however, they had a fair value of $6·5 million on 31 March 2015. During the year an investment which had a carrying amount of $1.4 million was sold for $1.6 million, (but the transaction was not yet recorded). Investment income in the trial balance above (does not) includes the profit on the sale of the investment (but include) dividends received during the year.
How the above calculation of investment income change? And there are any changes in the statement, like income statement or balance sheet?
Help me please, thank you.
Toress! This is stupid!
How can a trial balance show “The investments through profit or loss are those held at 31 March 2015 (after the sale below)”
The trial balance either shows the investments as they were at the start of the year so “at 31st March 2015” or it shows the investments at the end of the year and that would be after the sale during the year has been recorded
This is also stupid!
“During the year an investment which had a carrying amount of $1.4 million was sold for $1.6 million, (but the transaction was not yet recorded)”
What has happened to the cash? Is it hidden in the CFO’s desk drawer? An investment has been sold for $1.6 million but it hasn’t been recorded?
Is this an example of you trying to make a question more interesting by changing one or two phrases? Because you’ve produced a nonsense question!
What’s the matter with being happy with the question as it was originally set?
I can’t answer your question because it really (I’m sorry about this) does not make any sense
If I could help you, I would ….. but I can’t
Again, I’m sorry 🙁
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