Halberton Corp. purchased 1,000 common shares of Xenolt Ltd., a publically traded company, for $52,800. During the year Xenolt paid cash dividends of $2.50 per share. At year-end, due to a temporary downturn in the market, the shares had a market value of $50 per share. Halberton has no specific intention as to when it will sell the shares. Halberton follows IFRS.
Required:
a. How would Halberton classify and report this investment?
b. Prepare Halberton’s journal entries for the investment purchase, the dividend, and any year-end adjusting entries.
c. Prepare the sale entry if Halberton sells the investment one week into the next fiscal year for $54,200 cash.
d. How would the answer for part (a) change if Halberton followed ASPE?
