Provide the entry to record the year-end adjustment

Assignment Help Financial Accounting

Reference no: EM132795289

Bengals Corp. has the following portfolio of common shares at December 31, 2020:

Investments Carrying value Fair value

Apple $ 475,000 $ 570,000

American Airlines 925,000 620,000

Qualcomm 175,000 220,000

Total $1,500,000 $ 1,410,000

Bengals does not possess significant influence on any of these investments and 'Held for trading' was the management's intention.

On January 23, 2021, Bengals sold their entire investment of Apple for $655,000.

instructions:

Using proper descriptions of all accounts:

Problem 1: Provide the entry to record the 2020 year-end adjustment for these investments, assuming Bengals uses individual investment account to record its portfolio.

Problem 2: Provide the entry to record the disposal of the investment of Apple on January 23, 2021. Ignore transaction commission on this disposal.

Problem 3: Discuss succinctly how to determine if an investment possesses significant influence

Reference no: EM132795289

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