During 2021, the first year of operations, Dejavu Company purchased the following equity securities: Market Value December 31, 2021 1,400,000 Cost December 31, 2022 Security One Security Two Security Three Security Four 2,200,000 1,900,000 700,000 1,000,000 1,100,000 1,600,000 1,500,000 1,600,000 2,000,000 2,500,000 1,200,000 Security One and Security Two are held for trading and Security Three and Security Four are measured at fair value through other comprehensive income by election. During 2022, the entity sold Security Two for P1,000,000 and half of Security Four for P500,000. Revenues and operating (marketing and administrative) expenses for the year 2022 are P7,500,000 and P4,000,000 respectively. How much is the change in Retained Earnings for the year 2022 due to the equity securities (indicate whether increase or decrease)?
During 2021, the first year of operations, Dejavu Company purchased the following equity securities: Market Value December 31, 2021 1,400,000 Cost December 31, 2022 Security One Security Two Security Three Security Four 2,200,000 1,900,000 700,000 1,000,000 1,100,000 1,600,000 1,500,000 1,600,000 2,000,000 2,500,000 1,200,000 Security One and Security Two are held for trading and Security Three and Security Four are measured at fair value through other comprehensive income by election. During 2022, the entity sold Security Two for P1,000,000 and half of Security Four for P500,000. Revenues and operating (marketing and administrative) expenses for the year 2022 are P7,500,000 and P4,000,000 respectively. How much is the change in Retained Earnings for the year 2022 due to the equity securities (indicate whether increase or decrease)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:During 2021, the first year of operations, Dejavu Company purchased the following equity securities:
Market Value
Cost
December 31, 2021
December 31, 2022
Security One
Security Two
Security Three
Security Four
2,200,000
700,000
1,400,000
1,000,000
1,900,000
1,100,000
1,600,000
1,500,000
1,600,000
2,000,000
2,500,000
1,200,000
Security One and Security Two are held for trading and Security Three and Security Four are measured at
fair value through other comprehensive income by election. During 2022, the entity sold Security Two for
P1,000,000 and half of Security Four for P500,000. Revenues and operating (marketing and administrative)
expenses for the year 2022 are P7,500,000 and P4,000,000 respectively. How much is the change in
Retained Earnings for the year 2022 due to the equity securities (indicate whether increase or decrease)?
Transcribed Image Text:During 2021, the first year of operations, Dejavu Company purchased the following equity securities:
Market Value
Cost
December 31, 2021
December 31, 2022
Security One
Security Two
Security Three
Security Four
2,200,000
700,000
1,400,000
1,000,000
1,900,000
1,100,000
1,600,000
1,500,000
1,600,000
2,000,000
2,500,000
1,200,000
Security One and Security Two are held for trading and Security Three and Security Four are measured at
fair value through other comprehensive income by election. During 2022, the entity sold Security Two for
P1,000,000 and half of Security Four for P500,000. Revenues and operating (marketing and administrative)
expenses for the year 2022 are P7,500,000 and P4,000,000 respectively. How much is the change in
Retained Earnings for the year 2022 due to the equity securities (indicate whether increase or decrease)?
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