681 ABC Co. changes its business model and determines the following information: 7. Carrying amount of previous classification Fair value on reclassification date (Jan. 1, 20x3) financial asset under 100,000 120,000 Requirements: Provide the entry (entries) on reclassification date under the following scenarios: Amortized cost to FVPL a. FVPL to Amortized cost b. Amortized cost to FVOCI (mandatory) FVOCI (mandatory) to Amortized cost - the cumulative balance of gain previously recognized in equity is P5,000. FVPL to FVOCI (mandatory) FVOCI (mandatory) to FVPL the cumulative balance of gain previously recognized in equity is P5,000. C. www d. е. www f. २२७०घरा Investments 682 Chapter 11 Disclosu 12. Whic requi 9. ABC Co. acquires bonds with face amount of P100,000 at fair value of P100,000. The effective interest rate is 10%, equal to the nominal interest rate. ABC Co. classifies the bonds as Impairment finar subsequently measured at FVOCI a. At the reporting date, the fair value of the bonds decreases to P90,000. ABC Co. estimates 12-month expected credit losses of b. C. P3,000. d. Requirements: Prepare the year-end journal entries to recognize the impairment loss and to accrue the interest income for the year (Adapted (assume 1-year interest). 13. In Dividends wh 10. Karter Company purchased 200 out of the 1,000 outstanding shares of Flynn Company's common stock (ordinary shares) for P180,000 o January 2, 2004. During 2004, Flynn Company declared dividends of P30,000 and reported earnings for the year of P120,000 a. b. с. If Karter Company used the fair value method of accounting for its investment in Flynn Company, how much dividend income is recognized by Karter in 2004? (Adapted) d. (ACCA Stock rights 11. Karter Company holds 200 shares of Flynn Companys common stock. On September 30, 2004, Flynn Compay issued stock rights on a "1-for-1" basis. The stock rights PRO 1. C are exercisable until June 30, 2005. The stock rights have fair values per right of P5.00 and P5.50 on September 30, 2004 and December 31, 2004, respectively. How much is the carrying amount of the stock rights in Karter's December 31, 2004 Ja statement of financial position? (Adapted)