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Available for Sale (AFS) – Journal Questions

Journal Questions

Available-for-sale, Trade Currency TWD
Taiwan Opportunities Fund traded in Feng Tay Enterprises Co. Ltd., shares in the Taiwan stock exchange through KGI Securities Co., brokers, and the details are as follows:

Trade Details

Date                   Product               Quantity           Rate             B/S               Brokerage
5-Feb-X1         Feng Tay               64,000        27.30 TWD          B                5,350 TWD
15-Feb-X1       Feng Tay               30,500        26.25 TWD          B                2,850 TWD
5-Mar-X1         Feng Tay               85,700        25.85 TWD          S                4,750 TWD

Other Details
  Settlement: T + 3

Liquidation Method
  FIFO

Market Rate of Feng Tay Shares in TWD
  February 28: 26.95
  March 31: 27.90
  April 30: 30.15 

FX Rate: USD/TWD
  February 5: 32.67
  February 8: 32.63
  February 15: 32.76
  February 18: 32.79
  February 28: 32.98
  March 5: 32.83
  March 8: 32.87
  March 31: 32.90
  April 30: 32.77

Functional Currency
  USD

Prepare
Journal entries, general ledgers, trial balance, income statement, and balance sheet.

Available-for-sale, Trade Currency SGD
Singapore Fund traded in OCBC LTD shares in a Singapore Stock Exchange through Grayson & Co. brokers, and the details are as follows:

Trade Details

Date              Product          Quantity            Rate             B/S             Brokerage
 8-Feb-X1     OCBC LTD       6,000                9.30  SGD      B               558 SGD
15-Feb-X1    OCBC LTD       8,000                10.10 SGD     B               800 SGD
 9-Mar-X1     OCBC LTD     11,500                10.30 SGD     S               271 SGD

Other Details
  Settlement: T + 3

Liquidation Method
  FIFO

Market Rate of OCBC LTD Shares in SGD
  February 28: 10.15
  March 31: 9.80
  April 30: 10.35 

FX Rate: USD/SGD
  February 8: 1.54
  February 11: 1.52
  February 15: 1.51
  February 18: 1.53
  February 28: 1.52
  March 9: 1.55
  March 12: 1.53
  March 31: 1.50
  April 31: 1.54

Functional Currency
  USD

Prepare
Journal entries, general ledgers, trial balance, income statement, and balance sheet.

Available-for-sale, Functional Currency CAD
U.S. Fund traded in DSP shares in a Canadian stock exchange through Amazon brokers, and the details are as follows:

Trade Details

Date              Product               Quantity           Rate              B/S             Brokerage
18-Feb-X1      DSP                     5,000            15.15 CAD       B                50 CAD
25-Feb-X1      DSP                     8,000            16.10 CAD       B                80 CAD
19-Mar-X1      DSP                     7,500            16.30 CAD       S                75 CAD

Other Details
  Settlement: T + 3

Liquidation Method
  FIFO

Market Rate of DSP LTD Shares in CAD
  February 28: 16.15
  March 31: 16.80
  April 30: 16.35 

FX Rate: USD/CAD
  February 18: 1.0130
  February 25: 1.0185
  February 28: 1.0150
  March 19: 1.0220
  March 31: 1.0245
  April 31: 1.0190

Functional Currency
  USD

Prepare
Journal entries, general ledgers, trial balance, income statement, and balance sheet.

Available-for-Sale, Functional Currency JPY
DiAnna Smith buys 10,000 shares of GoldWinner on January 10 for $5.4 per share. Ms. Smith’s reporting currency is Japanese yen. The shares are bought without any intention of trading for short-term gains. Record the necessary journal entries for the following events:

1. For the purchase of the 10,000 shares.

2. The closing rate of GoldWinner shares on January 25 is $6.2 per share. Record the unrealized gains or loss entry.

3. The USD/JPY rate on January 10 is 109.15. The shares bought on January 10 are settled on January 12. On January 12 the USD/JPY rate is 108.05. Record the FX revaluation entries for these events. Calculate the FX gain/loss and pass relevant entries for FX translation.

4. The shares are sold on January 29 for $6.8 per share. Calculate the realized gain or loss and pass entry. The USD/JPY rate on liquidation is 109.24.

5. Prepare relevant ledger accounts to give effect to these transactions.

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