Reference no: EM132532749

An investment company that recently raised $3,000,000 from a public financing.. BOD has instructed the CFO to invest up to $2,000,000 in investments that it intends to actively trade and therefore will account for these investments at fair value through profit or loss. On the advice of the company's investment advisor, the following shares were purchased in October 2019:

Corporation          Number of shares             Total Cost

Apple inc                    25,000                       $ 1,000,000

Samsung                    20,000                         600,000

LG.                            100,000                       200,000

During December 2019, company received cash dividends of $40,000 from its investment in samsung.

In 2020, the following transactions took place:

• January 25 50,000 shares of LG. were purchased for $125,000.
• May 17 6,000 shares of Samsung of Canada were sold at $45 per share
• June 17 75,000 shares of Lucky Ltd were purchased at $15 per share
• September 25 100,000 shares of LG. were sold for net proceeds (i.e. after commissions) for $165,000. (For the purposes of determining the cost of shares sold, use the weighted average cost).
• As part of its banking arrangement, the company pays no commissions on the purchase of shares but is charged a 2% commission on the sale of all investments.

Market Price of investments - presented on a per share basis:

Investments            Jan 1, 2019             Dec 31, 2019               Dec 31, 2020

Apple                         110.00                      105.00                      130.00

Samsung                       27.00                        39.00                        43.00

LG                                    1.50                         1.75                      0.75

lucky                               9.00                            13.00                    16.00

Please help regarding:

Question a) journal entries relating to these investments for 2019.

Question b) journal entries relating to these investments for 2020.

Question c) why these investments are valued at current market value while other assets such as property, plant and equipment are not adjusted to fair market value.