Aborigine Company reported the following accounts in the statement of financial position on January 1, 2020: Noncurrent assets Financial asset-FVOCI Market adjustment for unrealized loss 4,000,000 ( 500,000) Market value 3,500,000 Other comprehensive income Unrealized loss ( 500,000) An analysis of the investment portfolio revealed the following on December 31, 2020. Cost Market XYZ ordinary share ABC ordinary share RST preference share 1,000,000 2,500,000 500,000 1,200,000 2,000,000 200,000 4,000,000 3,400,000 On July 1, 2021, the ABC ordinary share was sold for P2,100,000. On December 31, 2021, the remaining investments have the following market value: XYZ ordinary share RST preference share 1,000,000 150,000 Required: 1. Prepare journal entry to recognize the decrease in value on December 31, 2020. 2. Prepare journal entry to record the sale of ABC ordinary share on July 1, 2021. 3. Prepare journal entry on December 31, 2021 to recognize the change in fair value.

Aborigine Company reported the following accounts in the statement of financial position on January 1, 2020: Noncurrent assets Financial asset-FVOCI Market adjustment for unrealized loss 4,000,000 ( 500,000) Market value 3,500,000 Other comprehensive income Unrealized loss ( 500,000) An analysis of the investment portfolio revealed the following on December 31, 2020. Cost Market XYZ ordinary share ABC ordinary share RST preference share 1,000,000 2,500,000 500,000 1,200,000 2,000,000 200,000 4,000,000 3,400,000 On July 1, 2021, the ABC ordinary share was sold for P2,100,000. On December 31, 2021, the remaining investments have the following market value: XYZ ordinary share RST preference share 1,000,000 150,000 Required: 1. Prepare journal entry to recognize the decrease in value on December 31, 2020. 2. Prepare journal entry to record the sale of ABC ordinary share on July 1, 2021. 3. Prepare journal entry on December 31, 2021 to recognize the change in fair value.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter7: Operating Assets

Section: Chapter Questions

Problem 24CE

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