Marigold Corporation a Canadianbased international company t

Marigold Corporation, a Canadian-based international company that follows IFRS 9, has the following securities in its portfolio of investments acquired for trading purposes and accounted for using the FV-NI method on December 31, 2016:

In 2017, Marigold completed the following securities transactions:

Marigold Corporation’s portfolio of trading securities appeared as follows on December 31, 2017:

Assume that the company does not recognize and report dividends and other components of investment gains and losses separately.

1. Prepare the Marigold Corporation general journal entry to record the adjusting entry for December 31, 2016. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts.)

2. Prepare the Marigold Corporation general journal entry to record the sale of the David Jones Inc. shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts.)

3. Prepare the Marigold Corporation general journal entry to record the purchase of the Oberto Ltd. shares. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts.)

4. Prepare the Marigold Corporation general journal entry to record the adjusting entry for December 31, 2017. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select \"No Entry\" for the account titles and enter 0 for the amounts.)

Investments		Carrying Amount (before adjustment)		Fair Value
1,800 shares of David Jones Inc., common			$82,000			$77,000
6,000 shares of Hearn Corp., common			240,000			233,400
390 shares of Alessandro Inc., preferred			66,300			68,800
			$388,300			$379,200

Solution

Date Account titles and explanation Debit Credit Dec 31, 2016 Unrealized Holding Gain or Loss—Income. $          9,100 Fair Value Adjustment (trading). $          9,100 Mar 1, 2017 Cash [(1,800 X $38.14) – $400]. $        68,252 Loss on Sale of Investments. $        13,748 Equity Investments (trading). $        82,000 Apr 1, 2017 Equity Investments (trading)   [(500 X $75) + $1,400]. $        38,900 Cash $        38,900 Dec 31, 2017 Unrealized Holding Gain or Loss—Income. $              800 Fair Value Adjustment (trading). $              800 Investments Original Cost Fair Value Unrealized Gain(Loss) Hearn Corp., common $240,000 $234,600 $           (5,400) Oberto Ltd., common 37,500 35,500 $           (2,000) Alessandro Inc., preferred 66,300 63,800 $           (2,500) Total portfolio $343,800 $333,900 $           (9,900) Previous fair value adjustment—Cr. $           (9,100) Fair value adjustment—Cr. $              (800)