Carmela Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial instrument is classified at financial asset at fair value through other comprehensive income. The direct acquisition costs incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimated at P600,000. What gain should be recognized in the other comprehensive income for the year ended December 31, 2020? a Nil b.P900,000 c.P800,000 d.P200,000

Carmela Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial instrument is classified at financial asset at fair value through other comprehensive income. The direct acquisition costs incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimated at P600,000. What gain should be recognized in the other comprehensive income for the year ended December 31, 2020? a Nil b.P900,000 c.P800,000 d.P200,000

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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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

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Carmela Company acquired a financial instrument for P4,000,000 on March 31, 2020. The financial
instrument is classified at financial asset at fair value through other comprehensive income. The direct
acquisition costs incurred amounted to P700,000. On December 31, 2020, the fair value of the instrument
was P5,500,000 and the transaction costs that would be incurred on the sale of the investment are
estimated at P600,000. What gain should be recognized in the other comprehensive income for the year
ended December 31, 2020?
a.Nil
b.P900,000
c.P800,000
d.P200,000

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