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E17-18. Please show all workings clearly.
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- Paul Company presented the following information pertaining to its investments in equity securities. FVPL FVOCICost P1,000,000 P1,000,000Market value December 31, 2020 1,050,000 980,000 December 31, 2019 950,000 920,000 2.What amount should Paul report as unrealized gains/losses in the shareholders' equity of its December 31, 2020 statement of financial position?Paul Company presented the following information pertaining to its investments in equity securities. FVPL FVOCICost P1,000,000 P1,000,000Market value December 31, 2020 1,050,000 980,000 December 31, 2019 950,000 920,0001. What amount should Paul Company report as unrealized gain on its 2020 profit or loss? a. P160,000 b. P110,000 c. P100,000 d. P 50,000 2.What amount should Paul report as unrealized gains/losses in the shareholders' equity of its December 31, 2020 statement of financial position? a. P60,000 credit b. P20,000 debit c. P80,000 debit d. P20,000 credit- What is the unrealized gain (loss) reported in profit or loss for the year 2021?A. P31,000B. (P31,000)C. P43,000D. (P43,000) - How much was the gain or loss on the sale of CD shares? A. P1,100 gain B. P2,000 gain C. P15,000 loss D. P15,900 loss
- 22. During 2022, Haggard Company purchased marketable equity securities for P 1,850,000 to be held as trading investments. In 2022, the entity appropriately reported an unrealized loss of P 200,000 in the income statement. There was no change during 2022 in the composition of the portfolio of trading securities. Pertinent data on December 31, 2023 are: Security Cost Market value Inc (Dec) A 600,000 700,000 100,000 B 450,000 400,000 (50,000) C 800,000 900,000 100,000 Net Increase 150,000 What amount of unrealized gain on these securities should be included in the 2021 income statement?S16-9 On January 6, 2023, Ling Corp. paid $5,000,000 for its 40 percent investment in True World Inc. Assume that on December 31 that same year, True World earned net income of $1,800,000 and paid cash dividends of $800,000. What method should Ling Corp. use to account for the investment in True World Inc.? Give your reason. Ignore any brokerage commission expenses. Post to the Investment in True World Inc. Common Shares T- account. What is its balance after all the transactions are posted? Journalize these three transactions on the books of Ling Corp. Include an explanation for each entry.At December 31, 2018, Hull-Meyers Corp. had the following investments that were purchased during 2018, itsfirst year of operations:Cost Fair ValueTrading Securities:Security A $ 900,000 $ 910,000Security B 105,000 100,000Totals $ 1,005,000 $ 1,010,000 Securities Available-for-Sale:Security C $ 700,000 $ 780,000Security D 900,000 915,000Totals $ 1,600,000 $ 1,695,000Securities to Be Held-to-Maturity:Security E $ 490,000 $ 500,000Security F 615,000 610,000Totals $ 1,105,000 $ 1,110,000No investments were sold during 2018. All securities except Security D and Security F are considered shortterminvestments. None of the fair value changes is considered permanent.Required:Determine the following amounts at December 31, 2018.1. Investments reported as current assets2. Investments reported as noncurrent assets3. Unrealized gain (or loss) component of income before taxes4. Unrealized gain (or loss) component of accumulated other comprehensive income in shareholders’ equity
- What is the total amount that should be reported in profit or loss relating to the securities during 2020?Single choice. P 640,000 P 150,000 P 190,000 P 340,000 How much is the gain or loss to be recognize on the sale of 50% of DEF shares? P 20,000 gain 0 P 10,000 loss P 190,000 gainRed Company had the following portfolio of equity securities to other comprehensive income at December 31, 2018:Security Cost Market ValueA 400,000 390,000B 700,000 660,000Total 1,100,000 1,050,000If Red Company would have to sell the securities transaction cost will be incurred as follows; P20,000 and P30,000 for security A and B, respectively. In Red's December 31, 2018 statement of financial position, how much should be reported as the carrying value of the portfolio? a. 1,050,000 b. 1,060,000 c. 1,100,000 d. 1,110,000Use the following information on a company’s investments in equity securities to answer questions 1- 2 below. The company’s accounting year ends December 31. Investment Date of acquisition Cost Fair value 12/31/16 Date sold Selling price Ajax Company stock 6/20/16 $40,000 $35,000 2/10/17 $32,000 Bril Corporation stock 5/1/16 20,000 N/A 11/15/16 26,000 Coy Company stock 8/2/16 16,000 16,500 1/17/17 23,000 1. If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2016 income statement? 2. If the above investments are categorized as trading securities, what amount is reported for gain or loss on securities, on the 2017 income statement?
- During 2021, Opulence Company purchased marketable equity securities as short-term investment to be measured at fair value through other comprehensive income. The cost and market value on December 31, 2021 were: Security Cost Market value A 1,000 shares 300,000 350,000 B 10,000 shares 1,700,000 1,550,000 C 20,000 shares 3,150,000 2,950,000 The entity sold 10,000 shares of B on January 5, 2022 for P 1,450,000 What total amount should be charged to Retained Earnings as a result of the sale of equity securities in 2022?Lexington Co. has the following securities outstanding on December 31, 2020 (its first year of operations). Cost Fair Value Greenspan Corp. stock $20,000 $19,000 Summerset Company stock 9,500 8,800 Tinkers Company stock 20,000 20,600 $49,500 $48,400 During 2021, Summerset Company stock was sold for $9,200, the difference between the $9,200 and the “fair value” of $8,800 being recorded as a “Gain on Sale of Investments.” The market price of the stock on December 31, 2021, was Greenspan Corp. stock $19,900; Tinkers Company stock $20,500. Instructions a. What justification is there for valuing equity securities at fair value and reporting the unrealized gain or loss as part of net income? b. How should Lexington Co. report this information in its financial statements at December 31, 2020? Explain. c. Did Lexington Co. properly account for the sale of the Summerset Company stock? Explain. d. Are there any additional entries necessary for…McElroy Company has the following portfolio of investment securities at September 30, 2025, its most recent reporting date. Investment Securities 1: Horton, Inc. common (5,000 shares), Cost: $215,000, Fair Value: $200,000 Investment Securities 2: Monty, Inc. preferred (3,500 shares), Cost: 133,000, Fair Value: 140,000 Investment Securities 3: Oakwood Corp. common (1,000 shares), Cost: 180,000, Fair Value: 179,000 On October 10, 2025, the Horton shares were sold at a price of $54 per share. In addition, 3,000 shares of Patriot common stock were acquired at $54.50 per share on November 2, 2025. The December 31, 2025, fair values were Monty $106,000, Patriot $132,000, and Oakwood $193,000. Instructions:Prepare the journal entries to record the sale, purchase, and adjusting entries related to the equity securities in the last quarter of 2025. None of these investments represents significant influence. The Fair Value Adjustment account has a zero balance prior to September 30, 2025.
