On 1 January 2021, SR Bhd (SRB) purchases two quoted securities from the open market. The details of the purchases are as follows: Price (RM) Commission (RM) 1,000,000 ordinary shares of MA Bhd 2,500,000 10,000 1,000,000 bonds of ABB Bhd 1,000,000 5,000 BSB intends to trade these investments and will sell them when their market price increases by about 10% or more. On 31 March 2021, the quoted market price of MA Bhd’s ordinary shares is RM2.10 and the market price of the bonds of ABB Bhd closes at 95 sen per unit. On 30 April 2021, the quoted market price of MA Bhd’s ordinary shares is RM2.80 and the market price of the bonds of ABB Bhd remain the same (closes at 95 sen per unit). SRB decided to sell all units of MA Bhd’s ordinary shares. Required: (i) explain how BSB shall account for the two quoted investments. (ii) provide the journal entries to record the above transactions.
On 1 January 2021, SR Bhd (SRB) purchases two quoted securities from the open market. The details of the purchases are as follows:
Price (RM) Commission (RM) 1,000,000 ordinary shares of MA Bhd 2,500,000 10,000 1,000,000 bonds of ABB Bhd 1,000,000 5,000
BSB intends to trade these investments and will sell them when their market price increases by about 10% or more. On 31 March 2021, the quoted market price of MA Bhd’s ordinary shares is RM2.10 and the market price of the bonds of ABB Bhd closes at 95 sen per unit. On 30 April 2021, the quoted market price of MA Bhd’s ordinary shares is RM2.80 and the market price of the bonds of ABB Bhd remain the same (closes at 95 sen per unit). SRB decided to sell all units of MA Bhd’s ordinary shares.
Required:
(i) explain how BSB shall account for the two quoted investments.
(ii) provide the
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