Investments in Stocks - This portfolio is composed of GKKB Company shares (GanyanKabaKatigasBash) and ABC Company shares. The shares were not held for trading and management has elected to designate the investments at fair value through other comprehensive income. Date Account Debit Credit May 3, 2020 Investment in GKKB Company 25,250 Broker's fee 1,000 Cash 26,250 To record the acquisition of GKKB shares and its related transaction cost Investment in ABC Company 32,450 Cash 32,450 To record the acquisition of ABC shares, acquired at P32.45 per share December 31, 2020 Unrealized Gain / (Loss) on market changes 400 Investment in ABC Company 1,500 Investment in GKKB Company 1,900 To record the market value adjustment for 2020 May 28, 2021 Investment in ABC Company 5,000 Dividend income 5,000 Received 100 shares of ABC Company in lieu of cash dividends of P5 per share. ABC shares were selling for P42 per share on this date. December 31, 2021 Unrealized Gain / (Loss) on market changes 100 Investment in ABC Company 300 Investment in GKKB Company 200 To record the market value adjustment for 2021 Audit Notes: The changes in fair value were appropriately recognized in OCI. The journal entries pertaining to the market value adjustments was prepared by the accountant in accordance with the following information: Year Cost Market Value Unrealized Gain / (Loss) 2020 GKKB P25,250 P23,350 (P1,900) ABC 32,450 33,950 1,500 2021 GKKB P25,250 P24,950 (P300) ABC 32,450 32,650 200 Question 4: The retroactive adjustment to the beginning balance of retained earnings to correct the initial carrying value of the investment in stocks includes a debit / (credit) amounting to? (Use negative sign if credit) Question 5: The amount of unrealized gain or (loss) as of December 31, 2021 amounts to? (Use negative sign if loss) Question 6: The total amount that should be taken to profit or loss for 2021 amounts to? (Use negative sign if net expense)

Investments in Stocks - This portfolio is composed of GKKB Company shares (GanyanKabaKatigasBash) and ABC Company shares. The shares were not held for trading and management has elected to designate the investments at fair value through other comprehensive income. Date Account Debit Credit May 3, 2020 Investment in GKKB Company 25,250 Broker's fee 1,000 Cash 26,250 To record the acquisition of GKKB shares and its related transaction cost Investment in ABC Company 32,450 Cash 32,450 To record the acquisition of ABC shares, acquired at P32.45 per share December 31, 2020 Unrealized Gain / (Loss) on market changes 400 Investment in ABC Company 1,500 Investment in GKKB Company 1,900 To record the market value adjustment for 2020 May 28, 2021 Investment in ABC Company 5,000 Dividend income 5,000 Received 100 shares of ABC Company in lieu of cash dividends of P5 per share. ABC shares were selling for P42 per share on this date. December 31, 2021 Unrealized Gain / (Loss) on market changes 100 Investment in ABC Company 300 Investment in GKKB Company 200 To record the market value adjustment for 2021 Audit Notes: The changes in fair value were appropriately recognized in OCI. The journal entries pertaining to the market value adjustments was prepared by the accountant in accordance with the following information: Year Cost Market Value Unrealized Gain / (Loss) 2020 GKKB P25,250 P23,350 (P1,900) ABC 32,450 33,950 1,500 2021 GKKB P25,250 P24,950 (P300) ABC 32,450 32,650 200 Question 4: The retroactive adjustment to the beginning balance of retained earnings to correct the initial carrying value of the investment in stocks includes a debit / (credit) amounting to? (Use negative sign if credit) Question 5: The amount of unrealized gain or (loss) as of December 31, 2021 amounts to? (Use negative sign if loss) Question 6: The total amount that should be taken to profit or loss for 2021 amounts to? (Use negative sign if net expense)

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 20E: The investments of Steelers Inc. include a single investment: 33,100 shares of Bengals Inc. common...

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Investments in Stocks - This portfolio is composed of GKKB Company shares (GanyanKabaKatigasBash) and ABC Company shares. The shares were not held for trading and management has elected to designate the investments at fair value through other comprehensive income.

Date	Account	Debit	Credit
May 3, 2020	Investment in GKKB Company	25,250
	Broker's fee	1,000
	Cash		26,250
	To record the acquisition of GKKB shares and its related transaction cost

	Investment in ABC Company	32,450
	Cash		32,450
	To record the acquisition of ABC shares, acquired at P32.45 per share

December 31, 2020	Unrealized Gain / (Loss) on market changes	400
	Investment in ABC Company	1,500
	Investment in GKKB Company		1,900
	To record the market value adjustment for 2020

May 28, 2021	Investment in ABC Company	5,000
	Dividend income		5,000
	Received 100 shares of ABC Company in lieu of cash dividends of P5 per share. ABC shares were selling for P42 per share on this date.

December 31, 2021	Unrealized Gain / (Loss) on market changes	100
	Investment in ABC Company	300
	Investment in GKKB Company		200
	To record the market value adjustment for 2021

Audit Notes:

The changes in fair value were appropriately recognized in OCI.
The journal entries pertaining to the market value adjustments was prepared by the accountant in accordance with the following information:

Year	Cost	Market Value	Unrealized Gain / (Loss)
2020
GKKB	P25,250	P23,350	(P1,900)
ABC	32,450	33,950	1,500

2021
GKKB	P25,250	P24,950	(P300)
ABC	32,450	32,650	200

Question 4: The retroactive adjustment to the beginning balance of retained earnings to correct the initial carrying value of the investment in stocks includes a debit / (credit) amounting to? (Use negative sign if credit)

Question 5: The amount of unrealized gain or (loss) as of December 31, 2021 amounts to? (Use negative sign if loss)

Question 6: The total amount that should be taken to profit or loss for 2021 amounts to? (Use negative sign if net expense)

Question 7: The investment in stocks account is overstated or understated by? (Use negative sign if overstated)

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