On September 30 20x6 Riches Inc made three investments 1369

On September 30, 20x6, Riches Inc. made three investments: 1369 shares of Wendle Inc., 4140 shares of Sam International, and 807 shares of Hinter Inc. The shares of Wendle Inc. and Hinter Inc. are classified as FVTPL and the shares of Sam International are 1.00 classified as FVTOCI ton The market price per share is as follows: Sam International S5.25 $8.47 Wendle Inc. Hinter Inc. Sept. 30, x6 Dec. 31, x6 $13.00 $16.39 $7.36 $4.82 What amount would be reported as total comprehensive income for the year 20x6, assuming income before gains/losses on investments is $164972? Select one: O a. $167563 O b.$180894 C.$15922 O d. $13331

Solution

Soution :

FVTPL : Investments recognised at \" Fair value through Profit and loss A/c\"

FVTOCI : Investments recognised at \" Fair value through other comprehensive Income\"

Assumptions : The investments held are Available for sale securities and the gain or loss on the investment is net of tax adjustments if any.

Correct answer is b : $180,894

Total Comprehensive income = Income before gains/loss from investments + gain/loss of investments recognised though profit and Loss + Other comprehensive income (OCI)

In this case , the unrealised gain of Sam Internation securities is to be categorised under OCI while the gains and losses of Wendle Inc. and Hinter Inc are added to the current income from operations.

Please refer below table :

		Wendle Inc.	Sam	Hinter
	Date		Internation Inc.	Inc.
		FVTPL	FVTOCI	FVTPL
1	30-Sep	13	5	7
2	31-Dec	16	8	5
3	Quantity	1,369	4,140	807
4	Purchase price	17,797	21,735	5,940
5	Market price	22,438	35,066	3,890
6	Gain/(Loss)	4,640.91	13,330.80	(2,049.78)
I	Income before gains/loss from investments	164,972
II	Gain/loss for securities regonised at fair value through PL	2,591
III	Other Comprehensive Income		13,331
IV	Total Comprehensive Income ( I + II + III )	180,894