Answered: capitalise if the investment is…

Business

Accounting

capitalise if the investment is classified at fair value through OCI

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

ACE Ltd has an outstanding shares of 10,000,000 shares. Kimmy Ltd purchases 100,000 shares of ACE Ltd at $4 per share. Transaction cost is $1,000. How much will the company capitalise if the investment is classified at fair value through OCI?

Choose one of the following answers.

	401,000
	None of the above
	399,000
	400,000

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Recognition of transaction cost if the investment is classified at fair value through OCI

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