Answers
1) Unrealized gain/loss in trading recognized in P2020
The loss to be recognized in Profit and Loss Account= Market Value of Trading Securities- Cost of Trading Securities
=4600000-5000000=(400000)
2)Unrealized gain/loss to be recognized P2021
Gain to be recognized in Profit and Loss Account= Market Value of Trading Securities- Cost of Trading Securities
=5500000-4600000
=$900000
Gain to be recognized in Other Comprehensive Income=Market Value of Non-Trading Securities-Cost of Non-Trading Securities
=3300000-3000000
=$300000
Journal entries to recognize the changes in market value for 2020 and 2021.
| Date | Particulars | Debit | Credit |
| Dec-31 2020 | Profit and Loss A/c | 40000 | |
| To Trading Securities | 40000 | ||
| (Being fair value recorded) | |||
| Non-Trading Securities | 100000 | ||
| To Other Comprehensive A/c | 100000 | ||
| (Being fair value recorded) | |||
| Dec-31 2021 | Trading Securities | 90000 | |
| To Profit and Loss A/c | 90000 | ||
| (Being fair value recorded) | |||
| Non-Trading Securities | 200000 | ||
| To Other Comprehensive A/c | 200000 | ||
| (Being fair value recorded) |
Realised Gain on Sale of Trading Securities= Sale Value- Market Value=6000000-5500000 =500000
55,00,000 is the Market Value as recorded in books
Entry in 2020
Securities not held for trading (FVTOCI) dr. 3100000
To Securities not held for trading (AC) 3000000
To OCI ( gain) 100000
Entry in 2021
Securities not held for trading (FVTOCI) dr. 200000
To OCI ( gain) 200000
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