Lai Inc had the following investment transactions 1

Purchased Chang Corporation #8703

Lai Inc. had the following investment transactions:1. Purchased Chang Corporation preferred
shares as a trading investment and accounts for them using the fair value through profit or loss
model.2. Received a cash dividend on the Chang preferred shares.3. Purchased Government of
Canada bonds for cash, intending to hold them until maturity and account for them using the
amortized cost model.4. Accrued interest on the Government of Canada bonds.5. Sold half of
the Chang preferred shares at a price less than originally paid.6. On the first day of the year,
purchased 25% of Xing Ltd.'s common shares, which was enough to achieve significant
influence and account for the investment using the equity method.7. Received Xing's financial
statements, which reported a net loss for the year.8. Received a cash dividend from Xing.9. The
fair value of Chang's preferred shares was lower than cost at year end.10. The fair value of the
Government of Canada bonds was higher than amortized cost at year end and the fair value of
Xing Ltd.'s common shares is unknown?Instructions(a) Using the following table format, indicate
whether each of the above transactions would result in an increase (1), a decrease (2), or have
no effect (NE) on the specific element in the statement. The first one has been done for you as
an example.(b) If the company were reporting under IFRS, would any alternative(s) to the
models chosen be allowed? Explain.(c) If the company were reporting under ASPE, would any
alternative(s) to the models that were initially chosen be allowed? Explain.View Solution:
Lai Inc had the following investment transactions 1 Purchased Chang Corporation

ANSWER
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