(b) During the year 2017, Nestle Corp. sold 2,000 shares of Polland Co. for P114,600 and purchased 2,000 moreshares of Lj Inc. and 1,000 shares of Dwarfy Company. On December 31, 2017, Nestle's equity securities portfolioconsisted of the following:InvestmentLj, Inc.Lj, Inc.Dwarfy CompanyAlabang Corp.TotalsQuantity1,000 shares2,000 shares1,000 shares2,000 sharesCostFair valueP45,00099,00048,000216,000P408,000P60,000120,00036,00066,000P282,0006. What is the carrying amount of the investments on December 31, 2017?a.408,000b. 444,000282,000d. 246,000C. NESTLE Inc., invested its excess cash in equity securities during 2016. The business model for these investments isto profit from trading on price changes.(a) As of December 31, 2016, the equity investment portfolio consisted of the following:InvestmentLj, Inc.Polland Co.Alabang Corp.TotalQuantity1,000 shares2,000 shares2,000 sharesCostP45,000120,000216,000P381,000Fair ValueP63,000126,000180,000P369,000

Solution b: Carrying value of investment on Dec 31, 2017 = Fair value of portfolio = P282,000

During the year 2017, Nestle Corp. sold 2,000 shares of Polland Co. for P114,600 and purchased 2,000 more shares of Lj Inc. and 1,000 shares of Dwarfy Company. On December 31, 2017, Nestle's equity securities portfolio consisted of the following: Fair value Investment Lj, Inc. Lj, Inc. Dwarfy Company Alabang Corp. Totals Quantity 1,000 shares 2,000 shares 1,000 shares 2,000 shares Cost P45,000 99,000 48,000 216,000 P408,000 P60,000 120,000 36,000 66,000 P282,000

During the year 2017, Nestle Corp. sold 2,000 shares of Polland Co. for P114,600 and purchased 2,000 more shares of Lj Inc. and 1,000 shares of Dwarfy Company. On December 31, 2017, Nestle's equity securities portfolio consisted of the following: Fair value Investment Lj, Inc. Lj, Inc. Dwarfy Company Alabang Corp. Totals Quantity 1,000 shares 2,000 shares 1,000 shares 2,000 shares Cost P45,000 99,000 48,000 216,000 P408,000 P60,000 120,000 36,000 66,000 P282,000

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...

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