How much is the unrealized gain (loss) recognized in other comprehensiveincome on December 31, 20x1?Karen Co. purchased the following equity securities on January 1, 20x1 for a total amount ofP360,000.CostAlaska Co. preference sharesP200,000160,000Valdez Co. ordinary sharesTotalsP360,000The shares did not qualify for recognition as held for trading, thus they were classified asinvestment in equity securities measured at fair value through other comprehensive income.On December 31, 20x1, the portfolio of Karen Co. comprised the following.Fair value - 12/31/x1Alaska Co. preference sharesP240,00060,000Valdez Co. ordinary sharesTotalP300,000On December 31, 20x2, the portfolio of Karen Co. comprised the following:Fair value-12/31/x2Alaska Co. preference sharesP220,000Valdez Co. ordinary shares180,000TotalP400,000On February 2, 20x3, all of the Alaska Co. preference shares were sold for P160,000 net of transactioncosts.60,000100,000O (60,000)

As per IFRS If investment in equity shares other than those held for trading is measured at Fair…

ncome on December 31, 20x1? Karen Co. purchased the following equity securities on January 1, 2 P360,000. Cost P200,000 Alaska Co. preference shares Valdez Co. ordinary shares Totals 160,000 P360,000 The shares did not qualify for recognition as held for trading, thu investment in equity securities measured at fair value through other comp

ncome on December 31, 20x1? Karen Co. purchased the following equity securities on January 1, 2 P360,000. Cost P200,000 Alaska Co. preference shares Valdez Co. ordinary shares Totals 160,000 P360,000 The shares did not qualify for recognition as held for trading, thu investment in equity securities measured at fair value through other comp

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 15E

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2. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. O n July 1, 2022, half of the securities are sold for P1,400,000. On December 31, 20x2, how much shall be shown in the statement of comprehensive income as unrealized gain/ loss? (sample answer: 10,500 UG or 10,500 UL)
During 2022, Merry Co. purchased the following shares which it classified as FVPL investment: Shares No. of Shares Cost per share at the time of purchase Fair value per share on December 31, 2022 A 1,000 P100 P80 B 5,000 P20 P25 C 10,000 P4 P5 How much unrealized gain or loss will be recognized in the Profit or Loss Statement for these investments on December 31, 2022?
Founded on January 1, 20X1, Gehl Company had the following passive investments in equity securities at the end of 20X1 and 20X2: Equity Security Cost 12/31/X2 Fair Value A $ 96,000 $ 94,000 B 184,000 162,000 C 126,000 136,000 Required: If the company recorded a $4,000 debit to its Fair value adjustment account as its 20X2 fair value adjustment, what must have been the unrealized gain or loss reported at the end of 20X1?
Following is a list of investments owned by Ivanhoe Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,000 $8.00 $7.10 FDY Ltd. 3,000 6.90 6.95 CTN Corporation 4,600 5.00 5.80 On January 15, 2021, Ivanhoe sold the shares in CTN Corporation for $6.25 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
During 2021, Barto 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 as follows: Security No. of Shares Cost Market Value A 5,000 500,000 550,000 B 25,000 2,800,000 2,650,000 C 40,000 2,150,000 3,950,000 The entity sold 10,000 shares of B on January 5, 2022 for P150 per share. The market price per share of Security A and Security C is P320 and P150 respectively, as of December 31, 2022. What amount should be recognized in the Profit or Loss Statement as realized gain or loss on sale of equity securities during 2022?
The following transactions appear on the Equity investments at fair value through profit or loss account of Chicker Corporation Date Particulars Debit Credit 03/1/x6 Purchased 40,000 shares of PLDT at P 30.75/share and 20,000 shares of Benpress at P 23/share P 1,690,000 07/03/x6 Purchased PAG-IBIG 15% bonds, face value P 4,000,000. Interest dates July 1 and Jan 1. Maturity date July 1, 20x9 4,000,000 11/5/x6 Sold 14,400 shares of PLDT at P 30/share And 4,000 shares of Benpress at P 25/share P532,000 12/31/x6 Sold PAG-IBIG bonds at 98 plus accrued interest…
Following is a list of investments owned by Martinez Ltd., as of the company’s year-end, December 31, 2020: Investment No. Shares Cost Fair Value HFX Corporation 1,200 $9.00 $8.20 FDY Ltd. 2,100 6.50 6.55 CTN Corporation 3,700 7.00 7.60 On January 15, 2021, Martinez sold the shares in CTN Corporation for $8.10 per share. Prepare the journal entries required to record the sale, assuming the company uses the fair value through other comprehensive income without recycling method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date Account Titles and Explanation Debit Credit Jan. 15, 2021 (To adjust to current fair value) (To record the sale of shares) (Reclassification…
nEED IN 10 MINUTES 9. On January 1, 20x1, an entity purchased marketable equity securities for P2,500,000. The entity paid commission and taxes of P190,000. The equity securities do not qualify as financial asset held for trading. The entity made irrevocable election to present unrealized gain and loss in other comprehensive income. The securities have a market value of P2,600,000, and P2,750,000 on December 31, 20x1 and December 31, 20x2. On July 1, 2022, half of the securities are sold for P1,400,000. On July 1, 2022, the net increase/ decrease in retained earnings account is (sample answer: 10,500 increase or 10,500 decrease)
During 2021, Manu Company purchased shares of stock classified as short-term investment to be measured at fair value through other comprehensive income. The cost and fair value on December 31, 2021 were as follows: Security No. of Shares Cost Fair Value A 1,000 300,000 350,000 B 10,000 1,700,000 1,550,000 C 20,000 3,150,000 2,950,000 How much is the unrealized gain or loss to be recognized in other comprehensive income during 2021 for this investment?