During 2021, the first year of operations, Dejavu Company purchased the following equity securities: Market Value December 31, 2021 1,400,000 Cost December 31, 2022 Security One Security Two Security Three Security Four 2,200,000 1,900,000 700,000 1,000,000 1,100,000 1,600,000 1,500,000 1,600,000 2,000,000 2,500,000 1,200,000 Security One and Security Two are held for trading and Security Three and Security Four are measured at fair value through other comprehensive income by election. During 2022, the entity sold Security Two for P1,000,000 and half of Security Four for P500,000. Revenues and operating (marketing and administrative) expenses for the year 2022 are P7,500,000 and P4,000,000 respectively. How much is the change in Retained Earnings for the year 2022 due to the equity securities (indicate whether increase or decrease)?
During 2021, the first year of operations, Dejavu Company purchased the following equity securities: Market Value December 31, 2021 1,400,000 Cost December 31, 2022 Security One Security Two Security Three Security Four 2,200,000 1,900,000 700,000 1,000,000 1,100,000 1,600,000 1,500,000 1,600,000 2,000,000 2,500,000 1,200,000 Security One and Security Two are held for trading and Security Three and Security Four are measured at fair value through other comprehensive income by election. During 2022, the entity sold Security Two for P1,000,000 and half of Security Four for P500,000. Revenues and operating (marketing and administrative) expenses for the year 2022 are P7,500,000 and P4,000,000 respectively. How much is the change in Retained Earnings for the year 2022 due to the equity securities (indicate whether increase or decrease)?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1MC
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