Question

Monty Corporation had the following portfolio of investments at December 31, 2017, that qualified and were accounted for using the FV-OCI method:

		Quantity		Percent Interest			Cost per Share			Fair Value per Share
Frank Inc.		2,300 shares		8%			$10			$16
Ellis Corp.		4,900 shares		14%			24			21
Mendota Ltd.		4,000 shares		2%			30			24

Early in 2018, Monty sold all the Frank Inc. shares for $17 per share, less a 1% commission on the sale. On December 31, 2018, Monty’s portfolio consists of the following common shares:

		Quantity		Percent Interest			Cost per Share			Fair Value per Share
Ellis Corp.		4,900 shares		14%			$24			$29
Mendota Ltd.		4,000 shares		2%			30			23
Kaptein Inc.		2,300 shares		1%			24			21

Assume that Monty reports net income of $157,100 for its year ended December 31, 2018, and that the company follows a policy of capitalizing transaction costs and of transferring realized gains and losses from accumulated other comprehensive income directly to retained earnings.

A) What should be reported on Monty’s December 31, 2017 statement of financial position for this long-term portfolio? (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Monty Corporation
Statement of Financial Position

Date:

B) What should be reported on Monty’s December 31, 2018 statement of financial position for these investments? (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Monty Corporation
Statement of Financial Position

Date:

C) What should be reported on Monty’s 2018 statement of comprehensive income for the investments accounted for using the FV-OCI model? Prepare a partial 2018 statement of comprehensive income for Monty. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Monty Corporation
Statement of Comprehensive Income

Date:

Answer 1