has equity securities designated as at fair value Hilton, Inc. through profit or loss that were purchased during 2020. At the end of 2020, the securities had total fair value of P525,000. As of December 31, 2021, the cost and fair values are as follows: Cost P100,000 190,000 250,000 Fair Value P 90,000 210,000 235,000 Investment 1 2 The gain or loss that would be reported in profit or loss as a result of the valuation of the securities at the end of 2021 is Р 5,000 P10,000 P20,000 P25,000 а. b. c. d.
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- Refer to the information in RE13-11. Assume that on December 31, 2019, the investment in Cornett Company stock has a market value of 10,500. Prepare the year-end journal entry to record the unrealized gain or loss.Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.Mills Company had five convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight-line method) and dividends on each security during 2019. Each convertible security is described in the following table. The corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which the securities would be included in the diluted earnings per share computations.
- Trading Securities Pear Investments began operations in 2020 and invests in securities classified as trading securities. During 2020, it entered into the following trading security transactions: Purchased 20,000 shares of ABC common stock at $38 per share Purchased 32,000 shares of XYZ common stock at $17 per share At December 31, 2020, ABC common stock was trading at $39.50 per share and XYZ common stock was trading at $16.50 per share. Required: 1. Prepare the necessary adjusting entry to value the trading securities at fair market value. 2. CONCEPTUAL CONNECTION What is the income statement effect of this adjusting entry?Cariston, Inc. has equity securities designated as at fair value through profit or loss that were purchased during 2020. At the end of 2020, the securities had total market value of P525,000. As of December 31, 2021, the records show cost and market value as follows: Investment Cost Market Value 1 P100,000 P90,000 2 190,000 210,000 3 250,000 235,000 The gain or loss that would reported in profit or loss as a result of the valuation of the securities at the end of 2021 isLexington 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…
- Pompey Inc. carries the following marketable equity securities on its books at December 31, 2019 and 2020. All securities were purchased during 2019.Trading Securities: Cost Fair Value 12/31/19 12/31/20 P Company 500,000 260,000 400,000 R Company 260,000 400,000 400,000 T Company 700,000 600,000 500,000 Total 1,460,000 1,260,000 1,300,000 Financial asset @ FVOCI: Cost Fair Value 12/31/19 12/31/20 C Company 4,100,000 3,600,000 3,600,000 I Company 1,000,000 1,200,000 1,400,000 Total 5,100,000 4,800,000 5,000,000 The net amount to be recognized in 2020 comprehensive income isA Company had various equity investments at fair value through profit or loss transactions during 2019 and 2020. The acquisition cost of all the securities in its portfolio during 2019 was P532,000. At December 31, 2019 and December 31, 2020, the market value of these equity investments were P541,000 and P512,000, respectively. In 2021, all of these securities were sold for P550,000.1. Assuming no other transactions are noted regarding these financial assets at fair value through profit or loss, what is the amount of unrealized gain/loss reported in 2020 income statement relating to these securities? a. P29,000 loss b. P20,000 loss c. P29,000 gain d. P20,000 gain 2. What is the gain on sale reported in A Company's 2021 income statement? a. P38,000 b. P18,000 c. P9,000 d. P0A Company had various equity investments at fair value through profit or loss transactions during 2019 and 2020. The acquisition cost of all the securities in its portfolio during 2019 was P532,000. At December 31, 2019 and December 31, 2020, the market value of these equity investments were P541,000 and P512,000, respectively. In 2021, all of these securities were sold for P550,000. Assuming that the securities held by A Company are classified as at fair value through other comprehensive income, what is the gain on sale reported in A Company's 2020 Income statement? a. P38,000 b. P18,000 c. P9,000 d. P0
- During 2020, Carpenters Corporation purchased equity securities and carried them at fair value through other comprehensive income. Pertinent data follow:Earth Ordinary Wind Ordinary Fire OrdinaryCost P36,000 P80,000 P180,000Market value. 12/31/20 40,000 60,000 186,000 The unearned loss reported in Carpenter's 2015 profit or loss is: A. P0B. P6,000C. P10,000On its December 31, 2020, balance sheet, Cullumber Company reported its investment in equity securities, which had cost $720000, at fair value of $656000. At December 31, 2021, the fair value of the securities was $693000. What should Cullumber report on its 2021 income statement as a result of the increase in fair value of the investments in 2021?City Company purchased the following portfolio of equity securities during 2020 and the company has made an irrevocable designation as fair value to other comprehensive income. The following information pertains to the securitiesSecurity Cost Market Value 12/31/20X P 800,000 P 820,000 Y 1,300,000 1,320,000Z 220,000 280,000How much should City Company report as unrealized gain related to the securities transactions in its 2020 statement of financial position? a. none b. 20,000 unrealized gain c. 100,000 unrealized gain d. 120,000 unrealized gain