B) It also owns two financial asset investments in the shares of two listed companies. The...

B) It also owns two financial asset investments in the shares of two listed companies. The details are given below: Investment in company

A- Invested in shares on 1st June 2019 at a cost of RO 60,000 for the purpose of sale. It’s fair value at the end of the year is RO50,000 Investment in company B- Invested RO 20,000 to hold forever. Its fair value on 31st December 2019 is RO 25,000 a. What are the amounts that will appear in the Financial Statements of the company?

C) An investment which is classified as held for sale is currently valued under the revaluation model is RO 700,000. Its latest fair value is RO 600,000 and the assessed costs for selling the asset are RO10,000. a. Illustrate how this transaction would be recorded in the financial statements.

D) The phoenix group held 100,000 shares of XYZ ltd on 30th September 2019 costing RO 420,000 and spent RO 10,000 for the purchase. The shares were purchased for trading. On 31st December 2019, the fair value of a share was RO 5.10.

a. Show how it will appear in the financial statements of the company during the year ended 31st December 2019?

Expert Solution

Required B

As at Dec 31, 2019

The investment held for the purpose of sale shall be revalued at RO 50,000 and the loss of RO 10,000 shall be recognized in the Statement of Other Comprehensive Income
The investment hold forever shall be recorded at its cost of RO 20,000.

Therefore, the amounts that will appear in the Financial Statements of the company as at Dec 31, 2019 = RO 50,000 + RO 20,000 = RO70,000

Required C

An investment classified as held for sale shall be revalued at its fair value of $600,000 and the loss of RO 100,000 shall be recognized in the Statement of Other Comprehensive Income.

Required D

Cost of Purchase of the 100,000 shares of the XYZ ltd = $420,000 +$10,000 = $430,000

Fair Value as at Dec 31, 2019 = 5.10* 100,000 = $510,000

Thus the investment in shares shall be revalued at $510,000 and the gain of 80,000 shall be recognized in the statement of Inome.

For any clarification, please comment. Kindly Up Vote

ekkarill92 answered 1 year ago

Sandford Brokers is trying to promote investments in the shares of two stocks, A and B....

Sandford Brokers is trying to promote investments in the shares of two stocks, A and B. Their quantitative analysts have uncovered the following facts: Stock A has an average return of 7% and a risk of 4%. Stock B has an average return of 13% and a risk of 24% The correlation between the returns of the two assets is - 1 (minus one) The brokerage is approached by a client who is willing to investment $ 11 million in...

XYZ owns two investments, A and B that have a combined total value of $54,000. Investment...

XYZ owns two investments, A and B that have a combined total value of $54,000. Investment A is expected to pay $31,000 in 2 years from today and has an expected turn of 7.60 percent per year. Investment B is expected to pay $44,000 in 5 years from today and has an expected turn of R per year. What is R, the expected annual return for investment B? A. 12.32% B. 13.85% C. 11.80% D. 10.08% E. None of the...

Sasha owns two investments, A and B, that have a combined total value of 44,700 dollars....

Sasha owns two investments, A and B, that have a combined total value of 44,700 dollars. Investment A is expected to pay 26,600 dollars in 7 year(s) from today and has an expected return of 4.81 percent per year. Investment B is expected to pay 32,950 in 2 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? Answer as a rate in decimal format so that 12.34%...

Sasha owns two investments, A and B, that have a combined total value of 59,400 dollars....

Sasha owns two investments, A and B, that have a combined total value of 59,400 dollars. Investment A is expected to pay 28,000 dollars in 3 year(s) from today and has an expected return of 17.1 percent per year. Investment B is expected to pay 55,734 in 2 years from today and has an expected return of R per year. What is R, the expected annual return for investment B? Answer as a rate in decimal format so that 12.34%...

Sweeny Corporation owns 60 percent of Bitner Company's shares. Partial 20X2 financial data for the companies...

Sweeny Corporation owns 60 percent of Bitner Company's shares. Partial 20X2 financial data for the companies and consolidated entity were as follows: Sweeny Corporation Bitner Company Sales $ 550,000 $ 450,000 Cost of Goods Sold 310,000 300,000 Inventory, Dec. 31 180,000 210,000 On January 1, 20X2, Sweeny's inventory contained items purchased from Bitner for $75,000. The cost of the units to Bitner was $50,000. All intercorporate sales during 20X2 were made by Bitner to Sweeny. Required: a. What amount of...

1.Sasha owns two investments, A and B, that have a combined total value of 45,500 dollars....

1.Sasha owns two investments, A and B, that have a combined total value of 45,500 dollars. Investment A is expected to pay 20,500 dollars in 1 year(s) from today and has an expected return of 12.95 percent per year. Investment B is expected to pay 44,425 dollars in T years from today and has an expected return of 9.22 percent per year. What is T, the number of years from today that investment B is expected to pay 44,425 dollars?...

41. An investor who holds a portfolio a. Owns investments in several industries. b. Owns more...

41. An investor who holds a portfolio a. Owns investments in several industries. b. Owns more than one investment. c. Owns both bonds and stocks. d. Has invested an equal amount in several securities. 42. The rate of return from a portfolio is: a. Always greater than the return from any security within the portfolio. b. Equal to the rate of return from the best performing security in the portfolio. c. The weighted average of the rates of return of...

Assignment 2: Choose TWO public listed companies of Bursa Malaysia and access their financial statements for...

Assignment 2: Choose TWO public listed companies of Bursa Malaysia and access their financial statements for the year ended 2019. 1. Write the introduction of the selected companies. 2. Discuss the disclosure of the capital structure of both companies in their financial statements. 3. Analyse how the capital structure affects the performance of both companies. 4. Write a summary of the assignment.

(a) The following table provides information about two NZX listed companies, A Ltd and B Ltd,...

(a) The following table provides information about two NZX listed companies, A Ltd and B Ltd, with some missing entries: A Ltd B Ltd Actual return in share price for the current year 0.095 0.065 Expected return in share price for the current year ? ? Abnormal return in share price for the current year 0.00645 ? Market model equation E(R) = 0.033 + 1.010 × Rm ? Two analysts provide the following market model equations for B Ltd, respectively: Analyst...

Consider two firms which differ with respect to asset risk and financial leverage. Firm 1 owns...

Consider two firms which differ with respect to asset risk and financial leverage. Firm 1 owns assets worth $10,000,000, and has issued zero coupon bonds with a face value of $4,500,000. On the other hand, Firm 2 owns assets worth $25,000,000, and has issued zero coupon bonds with a face value of $15,000,000. The standard deviation of the return on firm 1’s assets is 40%, whereas the standard deviation of the return on firm 2’s assets is 50%. Assume that...

Question