The management of Que-B Bhd is targeting to accumulate funds to finance its projects. The strategy is to keep several portfolios with the specific intention to obtain the gains if the value of the investment appreciates in the future. Security portfolios I and Il are held at the end of Que-B Bhd's first year of operations and are shown in the following table: Cost Market Value Year-End Security RM36,000 RM39,000 RM17,000 RM20,000 d) As soon as adjusting the securities' values to their corresponding market values, Que-B Bhd elects to reclassify Security I as an FVTOCI security. On the date of the transfer, security l's market value is RM19,000. i. Explain how this should be accounted for by Que-B Bhd. ii. Show the relevant journal entries.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The management of Que-B Bhd is targeting to
accumulate funds to finance its projects. The
strategy is to keep several portfolios with the
specific intention to obtain the gains if the
value of the investment appreciates in the
future. Security portfolios I and Il are held at
the end of Que-B Bhd's first year of operations
and are shown in the following table:
Year-End
Security
Cost
Market
Value
RM36,000 RM39,000
||
RM17,000
RM20,000
d) As soon as adjusting the securities' values to
their corresponding market values, Que-B Bhd
elects to reclassify Security I as an FVTOCI
security. On the date of the transfer, security l's
market value is RM19,000.
i. Explain how this should be accounted for by
Que-B Bhd.
ii. Show the relevant journal entries.
Transcribed Image Text:The management of Que-B Bhd is targeting to accumulate funds to finance its projects. The strategy is to keep several portfolios with the specific intention to obtain the gains if the value of the investment appreciates in the future. Security portfolios I and Il are held at the end of Que-B Bhd's first year of operations and are shown in the following table: Year-End Security Cost Market Value RM36,000 RM39,000 || RM17,000 RM20,000 d) As soon as adjusting the securities' values to their corresponding market values, Que-B Bhd elects to reclassify Security I as an FVTOCI security. On the date of the transfer, security l's market value is RM19,000. i. Explain how this should be accounted for by Que-B Bhd. ii. Show the relevant journal entries.
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