Marcus Company made the following transactions in the ordinary shares of Cato Company designated as a financial asset at fair value through profit or loss: July 16, 2018- Purchased 10,000 shares at P45 per share. June 28, 2019 - Sold 2,000 shares for P51 per share. May 18, 2020- Sold 2,500 shares for P33 per share. The end-of-year market prices for the shares were as follows: December 31, 2018 - P47 per share December 31, 2019 - P39 per share December 31, 2020 - P31 per share 1. How much should be recognized in 2020 profit or loss as a result of the fair value changes? (use negative sign if your answer is a loss) 2. How much should be recognized as realized gain on sale for the year ended December 31, 2020? (use negative sign if your answer is a loss) 1

Marcus Company made the following transactions in the ordinary shares of Cato Company designated as a financial asset at fair value through profit or loss: July 16, 2018- Purchased 10,000 shares at P45 per share. June 28, 2019 - Sold 2,000 shares for P51 per share. May 18, 2020- Sold 2,500 shares for P33 per share. The end-of-year market prices for the shares were as follows: December 31, 2018 - P47 per share December 31, 2019 - P39 per share December 31, 2020 - P31 per share 1. How much should be recognized in 2020 profit or loss as a result of the fair value changes? (use negative sign if your answer is a loss) 2. How much should be recognized as realized gain on sale for the year ended December 31, 2020? (use negative sign if your answer is a loss) 1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Godo
At what amount is the investment in securities reported on the balance sheet under each of these methods at December 31, 2026? What is the total net income reported in 2026 under each of these methods?Kingbird Donald Inc. acquired 20% of the outstanding common stock of Theresa Ivanhoe Inc. on December 31, 2025. The purchase price was $1,205,000 for 48,200 shares. Ivanhoe Inc. declared and paid an $0.85 per share cash dividend on June 30 and on December 31,2026 . Ivanhoe reported net income of $692,000 for 2026 . The fair value of Ivanhoe's stock was $28 per share at December 31 ,2026, Assume that the security is a trading security.
Please help me
During 2021 Blossom Company purchased 8700 shares of Nash Inc. for $17 per share. During the year Blossom Company sold 1850 shares of Nash, Inc. for $22 per share. At December 31, 2021 the market price of Nash, Inc.’s stock was $15 per share. What is the total amount of gain/(loss) that Blossom Company will report in its income statement for the year ended December 31, 2021 related to its investment in Nash, Inc. stock? $-8150 $-17400 $-4450 $9250
How much should be reclassified to Retained Earnings as a result of derecognizing the investment in 2019?
On December 15, 2021, Blue Company paid $100,000 for 8,000 shares of Marble Company common stock. The ownership in Marble Company is 10%. Marble reported net income of $64,000 for the year ended December 31, 2021. The fair value of the Marble stock on that date was $54 per share. What amount will be reported in the balance sheet of Blue Company for the investment in Marble at December 31, 2021? Multiple Choice There is no correct answer. $387,000. $357,000. $372,000. $432,000.
On January 1, 2020, AB Company purchased the net assets of the CD Company by issuing 100,000 shares of its P1 par value stock when the fair value of the stock was P6.20. It was furtheragreed that Honey Mahogany would pay an additional amount on January 1, 2022, if the average income during the 2-year period of 2020-2021 exceeded P80,000 per year. The expected value of this consideration was calculated as P184,000; the measurement period is one year. What amount will be recorded as goodwill on January 1, 2020?A. ZeroB. 100,000C. 180,000D. 284,000
On January 2, 2021 Pod Company purchased 25% of the outstanding ordinary shares of Jobs, Inc. and subsequently used the equity method to account for the investment. During 2021 Jobs, Inc. reported net income of P420,000 and distributed dividends of P180,000. The ending balance in the Equity Investments account at December 31, 2021 was P320,000 after applying the equity method during 2021. What was the purchase price Pod Company paid for its investment in Jobs, Inc? a.) P170,000 b.) P260,000 c.) P380,000 d.) P470,000
Penta Company purchased 1,000 bonds of Gone Company in 2018 for $810 per bond and classified the investment as securities available-for-sale. The value of these holdings was $272 per bond on December 31, 2019, and $421 per bond on December 31, 2020. During 2021, Penta sold all of its Gone bonds at $390 per bond. In its 2021 income statement, Penta would report: 53 Multiple Choice A trading gain of $31,000 and an unrealized holding loss of $390,00. A loss on the sale of investments of $420,000. A realized gain of $31,00O. A recognition of unrealized holding losses of $272,00o. 7 of 16 Next >
Entity A has purchased an investment of 15,000 shares on 1 August 2019 at a cost of $7.75 each. Entity A intends to sell these shares in the short term, and are holding them for trading purposes. Transaction cost on the purchase amounted to $1,500. At the year-end of 30 September 2019, these shares were now worth $8.50 each. On 15 October 2019, these shares were worth $8.00 each. All shares were sold at $125,600. REQUIRED: Provide journal entries for Entity A from 1 August 2019 to 15 October 2019 in accordance with relevant accounting standards. ACCOUNTS FOR INPUT: | Financial asset (Amortised Cost) | Financial asset (FVTPL) | Financial asset (FVTOCI) | | Financial liability | Equity instrument | Transaction cost | Bank | Loss allowance | Impairment loss | | Gain on remeasurement (P/L) | Loss on remeasurement (P/L) | Gain on remeasurement (OCI) | Loss on remeasurement (OCI) | | Payable | Receivable | Other income | Other expense | Reclassification (P/L) | Reclassification (OCI) | |…
In the December 31, 2020, statement of financial position, what is the carrying amount of the investment in equity securities?On January 2, 2020, Megan, INC. acquired a 15% interest in Kiyosaki Corp. by paying P8, 000, 000 for 100,000 ordinary shares. On this date, the net assets of Kiyosaki Corp. totaled P40, 000, 000. The fair values of Kiyosaki Corp.'s identifiable assets and liabilities were equal to their book values. Megan did not have the ability to exercise significant influence over the operating and financial policies of Kiyosaki. Megan received dividends of P1.40 per share from Kiyosaki on October 1, 2020. Kiyosaki reported net income of P5, 000, 000 for the year ended December 31, 2020. Megan classified the investment as at fair value through other comprehensive income. Market price for the 100,000 shares was P9, 000, 000 on December 31, 2020.Megan paid P30, 000, 000 on January 1, 2021, for 300,000 additional Kiyosaki ordinary shares, which represents a 25% interest in…
Kristopher Company began operations in 2014. At 12/31/22, Kristopher had a debit balance of $25,000 in its Allowance for Adjustment to Market. At January 1, 2022, Kristopher owned the following securities, accounted for using the fair value method. Cost MJO Common (25,000 shares) $550,000 JKH Preferred (1,900 shares) 199,500 EKH Common (7,500 shares) 82,500 During 2022 the following events occurred: 4/3/22 Sold 3,000 shares of MJO for $75,000. 9/6/22 Acquired 1,500 shares of WVO Common for $25 per share. At 12/31/22, the fair values for Kristopher’s securities were: MJO Common, $24 per share JKH Preferred, $103 per share EKH Common, $13 per share WVO Common, $27 per share Required: Prepare any journal entries required in 2022 to record the securities activity, including any required adjusting entries at 12/31/22. Show any calculations.…