XY puchased 2% of the equity shares of FG on 1 October 20X3.

CIMA F2 Question Answer

XY paid $25,000 for the shares as well as a transaction cost of 2.5% of the purchase price.

The shares are being held for short term trading and XY intend to sell them in December 20X3.

At the year end of 31 October 20X3, the shares in FG could be sold for $28,000.

What is the journal entry to record the subsequent measurement for this investment at 31 October 20X3?

Debit investment in equity shares $3,000 and credit profit or loss $3,000.

Debit investment in equity shares $3,000 and credit other reserves $3,000.

Debit investment in equity shares $2,375 and credit profit or loss $2,375.

Debit investment in equity shares $2,375 and credit other reserves $2,375.

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