Chapter 1448Investmacarrying amount of P1,300,000 on January 1, 20x1, under theequity method. On September 1, 20x1, Art sells 75% of theinvestment at P140 per share - the fair value on this date. Ariincurs transaction costs of P120,000 on the sale. Ritz reportsprofit of P4,200,000 for the year and declares cash dividends ofP1,200,000 on December 31, 20x1. The profit is earned evenlyduring the year. Ritz's shares are selling at P130 per share onDecember 31, 20x1. How much is the net effect of theinvestment in Art Co.'s profit or loss in 20x1?a. 2,092,500OrDaaceov10evdishDeb. 2,289,500.c. 2,356,500d. 2,420,500Sha.Fact pattern for the.next two questions:Lim Co. sells one-fourth of its 20% investment in Teg Co'sordinary shares for P500,000. Information on the date of sale is asfollows:Investment in Teg's shares (equity method)• Cumulative share in Teg's exchangedifferences on translation of a foreign operationb.C.d.1,200,00014. TH31100,000 Crfo11. What would be the effect of the sale transaction on Lim Co.'sDefirprofit or loss if after the sale: (1) Lim Co. loses significantinfluence over Teg Co.; and (2) Lim Co. retains significantinfluence over Teg Co.?a. (1) 225,000; (2) 300,000b. (1) 300,000; (2) 275,000reacfirc. (1) 300,000; (2) 225,000d. (1) 275,000; (2) 300,000ea12. What would be the effect of the sale transaction on Lim Co.'sprofit or loss if the accumulated other comprehensive incomerepresents revaluation gain (rather than translation gain) andLim Co. retains significant influence over Teg Co. after thea.b.C.d.(Adaptersale?а. 175,000b. 200,000с. 225,000d. 275,00013. Sun Co. accounts for its 8% interest in the 100,000 outstandingshares of Day Co. as held for trading securities. Theinvestment has a carrying amount of P800,000 on Jan. 1, 20xl.15. JolJOEinInvestrInvestr

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11. What would be the effect of the sale transaction on Lim Co." profit or loss if after the sale: (1) Lim Co. loses significar influence over Teg Co.; and (2) Lim Co. retains significa influence over Teg Co.? a. (1) 225,000; (2) 300,000 b. (1) 300,000; (2) 275,000 c. (1) 300,000; (2) 225,000 d. (1) 275,000; (2) 300,000

11. What would be the effect of the sale transaction on Lim Co." profit or loss if after the sale: (1) Lim Co. loses significar influence over Teg Co.; and (2) Lim Co. retains significa influence over Teg Co.? a. (1) 225,000; (2) 300,000 b. (1) 300,000; (2) 275,000 c. (1) 300,000; (2) 225,000 d. (1) 275,000; (2) 300,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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See attached 5.39
5. In 2020, the entity purchased the following equity securities for the purpose of selling them in the near term. 12/31/2021 P1,920,000 Fair Values 6/30/2022 P1,800,000 Cost P2,000,000 On June 30, 2022, the entity transferred its investment to financial assets at FVTOCI because of a rare circumstance (arising from a single event that is unusual and highly unlikely to recur in the near term). 12/31/2022 P1,720,000 What amount should the entity report as unrealized loss in its 2022 profit or loss? a. P200,000 b.P120,000 c. P80,000 d.PO
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