DEF, Inc. had the following portfolio of financial assets as of December 31, 2021 before any year-end fair value adjustments: Investment Ben Corp. stocks (20,000 shares) Chris, Inc. stocks (40,000 shares) Balance P605,000 1,100,000 The shares of Ben Corp. were acquired on February 20, 2021 with an intention of generating short- term profits from the share price's fluctuations. The company paid P30.25 per share, which includes P1.25 per share broker's fees and commissions. A P2 per share cash dividends were received on March 30. These dividends were declared by Ben Corp. on January 20, 2021 to stockholders as of record date March 1, 2021. The shares of Ben Corp. are trading at P30/share at year-end. • The company paid P27.50 per share, including PO.50 per share broker's fees and commissions on the acquisition of Chris, Inc.'s stocks on March 1, 2021 for trading purposes. A P3 per share dividends were received from the said shares on May 3, 2021. The dividends were declared on April 1 to stockholders as of record date April 20, 2021. The shares of Chris, Inc. are trading at P25/share at year-end. What is the correct balance of the investment in equity securities to be presented in the statement of financial position on December 31, 2021? . What is the gain (loss) from change in fair value to be recognized in profit or loss in 2021? (Indicate if gain or loss)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

answer pls ty

For the next (2) two questions:
DEF, Inc. had the following portfolio of financial assets as of December 31, 2021 before any year-end fair
value adjustments:
Balance
P605,000
1,100,000
Investment
Ben Corp. stocks (20,000 shares)
Chris, Inc. stocks (40,000 shares)
• The shares of Ben Corp. were acquired on February 20, 2021 with an intention of generating short-
term profits from the share price's fluctuations. The company paid P30.25 per share, which includes
P1.25 per share broker's fees and commissions. A P2 per share cash dividends were received on
March 30. These dividends were declared by Ben Corp. on January 20, 2021 to stockholders as of
record date March 1, 2021. The shares of Ben Corp. are trading at P30/share at year-end.
The company paid P27.50 per share, including P0.50 per share broker's fees and commissions on
the acquisition of Chris, Inc.'s stocks on March 1, 2021 for trading purposes. A P3 per share
dividends were received from the said shares on May 3, 2021. The dividends were declared on April
1 to stockholders as of record date April 20, 2021. The shares of Chris, Inc. are trading at P25/share
at year-end.
9. What is the correct balance of the investment in equity securities to be presented in the statement of
financial position on December 31, 2021?
10. What is the gain (loss) from change in fair value to be recognized in profit or loss in 2021? (Indicate if
gain or loss)
Transcribed Image Text:For the next (2) two questions: DEF, Inc. had the following portfolio of financial assets as of December 31, 2021 before any year-end fair value adjustments: Balance P605,000 1,100,000 Investment Ben Corp. stocks (20,000 shares) Chris, Inc. stocks (40,000 shares) • The shares of Ben Corp. were acquired on February 20, 2021 with an intention of generating short- term profits from the share price's fluctuations. The company paid P30.25 per share, which includes P1.25 per share broker's fees and commissions. A P2 per share cash dividends were received on March 30. These dividends were declared by Ben Corp. on January 20, 2021 to stockholders as of record date March 1, 2021. The shares of Ben Corp. are trading at P30/share at year-end. The company paid P27.50 per share, including P0.50 per share broker's fees and commissions on the acquisition of Chris, Inc.'s stocks on March 1, 2021 for trading purposes. A P3 per share dividends were received from the said shares on May 3, 2021. The dividends were declared on April 1 to stockholders as of record date April 20, 2021. The shares of Chris, Inc. are trading at P25/share at year-end. 9. What is the correct balance of the investment in equity securities to be presented in the statement of financial position on December 31, 2021? 10. What is the gain (loss) from change in fair value to be recognized in profit or loss in 2021? (Indicate if gain or loss)
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Accounting for Current liabilities, Provisions and Contingencies
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education