MGT220H5 Chapter Notes - Chapter 5-10: Canada Revenue Agency, Weighted Arithmetic Mean, Accrual
Document Summary
Held for trading investments: hold for a short period and then sell it for more than its cost: can be shares or bonds in another company. If price of share increases gain and if decreases loss: journal entry for purchase of investment. Cr cash: journal entry for receiving cash dividend. Unrealized gains and losses: held for trading investments are reported on the balance sheet at fair value, fair value: amount a willing buyer will pay to a willing seller to acquire the investment, ex. Shares have risen by and fair value is . It is an unrealized gain because they have not yet sold the investment. It is a gain because the fair value is greater than the investment cost. A gain has the same effect on owners" equity as revenue. 102000 will be recorded on balance sheet and 2000 will be recorded on income statement as an unrealized gain.
