Question 1 to 13 Relates  to the following information Financial Instruments Organic Farms Ltd has a 31 December year end. The following transactions relate to Organic Farms Ltd: Transaction 1 Organic Farms Ltd acquired 20 000 shares in Invest Ltd for N$12,50 per share on 1 June 2020. Transaction costs amounted to N$2 500. On 30 June 2021 Organic Farms decided to sell 5 000 of these shares when they were trading at N$12,00 each. The fair value of these shares as at 31 December 2020 was N$11,00 per share and N$11,50 as at 31 December 2021. Transaction 2 Organic Farms Ltd acquired 30 000 shares in Wealthy Ltd for capital appreciation purposes for N$10,50 per share on 1 January 2019. Transaction cost amounted to N$3 000. The fair value of these shares as at 31 December 2019 was N$9,50 per share. As at 31 December 2020 the share price decreased to N$7,00 per share. At 31 December 2021 the share price improved to N$11,00 per share. Organic Farms Ltd elected in terms of IFRS 9.5.7.5 to present subsequent changes in the fair value of the shares in other comprehensive income. Transaction 3 Organic Farms Ltd borrowed N$98 500 cash from Windhoek Bank Ltd on 1 January 2020. The loan is repayable in four equal instalments of N$33 475 at the end of each year. The effective interest rate is 13.522%.   On 1 January 2021, after paying the first instalment in 2020, Organic Farms Ltd was able to renegotiate the terms of the loan payable in order to improve its cash position for the next three years. On the same day, Organic Farms Ltd settled the loan by issuing 10 000 of its own ordinary shares, at a price of N$8 each, as full and final settlement of the loan payable. Any gains or losses on settlement are recognised in profit and loss. Question 1 to 4 relates to Transaction 1 1.
Select the correct option: The 20 000 shares acquired in Invest Ltd are recognised in the accounting records of Organic Farms Ltd as

A Financial Liability

b.

A Financial Asset

c.

None of the above

2. Transaction costs are capitalised when the asset is classified as at fair value through profit and loss? Select one: True False 3. The fair value gain/loss recognised at the end of the 2020 financial year was: a. A fair value gain of 30,000 b. A fair value gain of 27,500 c. A fair value loss of 27,500 d. A fair value loss of 30,000 The total fair value gain/loss recognised for the 2021 financial year is: a. A fair value loss of 12,500 b.

1. A fair value gain of 20,000

c. A fair value gain of 12,500 d. A fair value loss of 7,500 The fair value gain/loss recognised at the end of the 2019 financial year was: a. A fair value loss of 33,000 b. A fair value loss of 75,000 c. A fair value gain of 30,000 d. A fair value gain of 33,000