sa.3 Grouper Inc. follows IFRS. Grouper holds a variety of investments, some of which are accounted for at fair valuethrough net income and some of which are accounted for at fair value through other comprehensive income. OnJanuary 1, 2023, the beginning of the fiscal year, Grouper's accounts and records include the following information:Fair value through net income investmentsFair value through other comprehensive income investmentsMarket values for the FV-NI investments and FV-OCI investments at December 31, 2023, were $62,100 and $77,900,respectively. Computers that are used to track investment performance were purchased during 2023 for $20,000. Fortax purposes, assume the computers are in Class 10 with a CCA rate of 30% (assume the Accelerated InvestmentIncentive applies for these computers). Depreciation expense for the year was $4,000. Grouper recorded meals andentertainment expenses of $25,800 related to "wining and dining" clients. The CRA allows 50% of these costs as adeductible business expense.(a)Grouper's income before income tax for 2023 is $118,000. This amount does not include any entries to adjustinvestments to market values at December 31, 2023. Grouper's tax rate for 2023 is 25%, although changes enacted intax legislation before December 31, 2023, will result in an increase in this rate to 30% for 2024 and subsequenttaxation years. Assume that these rates apply to all income that is reported. There were no deferred tax accounts atJanuary 1, 2023.Date Account Titles and ExplanationDecemberFV-NI Investments31, 2023Cost$64,00073,000Prepare journal entries to reflect the difference between the carrying amount and market value for the aboveinvestments at Grouper's year end of December 31, 2023. (List all debit entries before credit entries.Credit account titles are automatically indented when the amount is entered. Do not indentmanually. If no entry is required, select "No Entry for the account titles and enter 0 for theamounts.)December31, 2023MarketValue$64,00073,000(To record fair value adjustment for FV-NIinvestments)(To record fair value adjustment for FV-OCIinvestments)Debit|||Cr

There are journal entries which are required to be made and recorded for the adjustments to record…

Prepare journal entries to reflect the difference between the carrying amount and market value for the above investments at Grouper's year end of December 31, 2023. (List all debit entries before credit entries. 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.) Date Account Titles and Explanation December 31, 2023 December 31, 2023 FV-NI Investments (To record fair value adjustment for FV-NI investments) (To record fair value adjustment for FV-OCI investments) Debit Cr 11

Prepare journal entries to reflect the difference between the carrying amount and market value for the above investments at Grouper's year end of December 31, 2023. (List all debit entries before credit entries. 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.) Date Account Titles and Explanation December 31, 2023 December 31, 2023 FV-NI Investments (To record fair value adjustment for FV-NI investments) (To record fair value adjustment for FV-OCI investments) Debit Cr 11

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Concept explainers

Bad Debts

At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.

Accounts Receivable

The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.

Question

sa.3

Grouper Inc. follows IFRS. Grouper holds a variety of investments, some of which are accounted for at fair value
through net income and some of which are accounted for at fair value through other comprehensive income. On
January 1, 2023, the beginning of the fiscal year, Grouper's accounts and records include the following information:
Fair value through net income investments
Fair value through other comprehensive income investments
Market values for the FV-NI investments and FV-OCI investments at December 31, 2023, were $62,100 and $77,900,
respectively. Computers that are used to track investment performance were purchased during 2023 for $20,000. For
tax purposes, assume the computers are in Class 10 with a CCA rate of 30% (assume the Accelerated Investment
Incentive applies for these computers). Depreciation expense for the year was $4,000. Grouper recorded meals and
entertainment expenses of $25,800 related to "wining and dining" clients. The CRA allows 50% of these costs as a
deductible business expense.
(a)
Grouper's income before income tax for 2023 is $118,000. This amount does not include any entries to adjust
investments to market values at December 31, 2023. Grouper's tax rate for 2023 is 25%, although changes enacted in
tax legislation before December 31, 2023, will result in an increase in this rate to 30% for 2024 and subsequent
taxation years. Assume that these rates apply to all income that is reported. There were no deferred tax accounts at
January 1, 2023.
Date Account Titles and Explanation
December
FV-NI Investments
31, 2023
Cost
$64,000
73,000
Prepare journal entries to reflect the difference between the carrying amount and market value for the above
investments at Grouper's year end of December 31, 2023. (List all debit entries before credit entries.
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.)
December
31, 2023
Market
Value
$64,000
73,000
(To record fair value adjustment for FV-NI
investments)
(To record fair value adjustment for FV-OCI
investments)
Debit
|||
Cr

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