Lima Limited (LL) had the following transactions relating to investments during 2017:
9,000 common shares of Northern Corporation at $33.50 per share,?? plus commissions of $1,980. ?Northern is a publicly-traded company with millions of shares outstanding.
5,000 common shares of Orion Limited at $52.00 per share,?? plus commissions of $3,370.? Orion is a publicly-traded company will millions of shares outstanding.
LL sold one-third of the Northern shares at $35.00 per share, minus commissions of $2,850.
LL?s year-end is December 31.? At year-end, the Northern shares had a market value of $30.00 per share and the Orion shares had a market value of $55.00 per share.
REQUIRED (Ignore income taxes)
Based on the given information, would it be reasonable for LL to consider these investments to be ?strategic investments??? Explain.
LL chooses to account for these investments using the FVPL method.? Prepare the applicable journal entries for the current year, including the adjusting entries at year-end.? Do not prepare any closing entries.
Complete the following table:
FVPL Investment in Northern (as of December 31)
FVPL Investment in Orion (as of December 31)
Net income (for the year ended December 31)
Other Comprehensive Income (for the year ended December 31)
Comprehensive income (for the year ended December 31)
Prepare the applicable closing entries as of December 31.
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