37. An entity neglected to amortize the premium on outstanding bonds payable. What is the effect of the failure to record premium amortization in interest expense and bond carrying amount, respectively? a. Understated and understated b. Understated and overstated c. Overstated and overstated d. Overstated and understated
37. An entity neglected to amortize the premium on outstanding bonds payable. What is the effect of the failure to record premium amortization in interest expense and bond carrying amount, respectively? a. Understated and understated b. Understated and overstated c. Overstated and overstated d. Overstated and understated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Show solution pleas
thanks
Transcribed Image Text:37. An entity neglected to amortize the premium on outstanding bonds payable. What is the
effect of the failure to record premium amortization in interest expense and bond carrying
amount, respectively?
a. Understated and understated
b. Understated and overstated
c. Overstated and overstated
d. Overstated and understated
On January 1, 2022, Moises Corp. acquired ordinary shares (par value, P50) of Ezekiel
Corporation for a total consideration of P3,600,000 which includes P36,000 transaction costs.
These shares were acquired for short-term trading purposes. On December 31, 2022, Ezekiel
Corporation ordinary shares were selling at P58 per share.
On March 31, 2023, Ezekiel Corporation issued 25% ordinary share dividends. The market
price of the Ezekiel Corporation ordinary shares on this date was P62 per share. On October
29, 2023, Moises sold 30,000 of its Ezekiel Corporation ordinary shares at P57 per share.
The market price of Ezekiel Corporation ordinary shares on December 31, 2023 is P52 per
share.
38. What amount of unrealized gain (loss) on fair value change shall be reported in profit or loss
for 2022?
a. 84,000
b. (84,000)
c. 120,000
d. (120,000)
39. What amount of dividend income shall be recognized during 2023?
a. Zero
b. 180,000
c. 750,000
d. 930,000
40. What amount of gain (loss) on sale shall be reported for 2023?
a. 30,000
b. (30,000)
c. 318,000
d. (318,000)
41. At what amount should the investment be reported on December 31, 2023?
a. 1,560,000
b. 1,740,000
c. 2,088,000
d. 2,340,000
42. What amount of unrealized gain (loss) on fair value change shall be reported in profit or loss
for 2023?
a. 252,000
b. (252,000)
c. 306,000
d. (306,000)
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education