How much is the unrealized gain (loss) recognized in other comprehensiveincome on December 31, 20x1?Karen Co. purchased the following equity securities on January 1, 20x1 for a total amount ofP360,000.CostAlaska Co. preference sharesP200,000160,000Valdez Co. ordinary sharesTotalsP360,000The shares did not qualify for recognition as held for trading, thus they were classified asinvestment in equity securities measured at fair value through other comprehensive income.On December 31, 20x1, the portfolio of Karen Co. comprised the following.Fair value - 12/31/x1Alaska Co. preference sharesP240,00060,000Valdez Co. ordinary sharesTotalP300,000On December 31, 20x2, the portfolio of Karen Co. comprised the following:Fair value-12/31/x2Alaska Co. preference sharesP220,000Valdez Co. ordinary shares180,000TotalP400,000On February 2, 20x3, all of the Alaska Co. preference shares were sold for P160,000 net of transactioncosts.60,000100,000O (60,000)

ncome on December 31, 20x1? Karen Co. purchased the following equity securities on January 1, 2 P360,000. Cost P200,000 Alaska Co. preference shares Valdez Co. ordinary shares Totals 160,000 P360,000 The shares did not qualify for recognition as held for trading, thu investment in equity securities measured at fair value through other comp

ncome on December 31, 20x1? Karen Co. purchased the following equity securities on January 1, 2 P360,000. Cost P200,000 Alaska Co. preference shares Valdez Co. ordinary shares Totals 160,000 P360,000 The shares did not qualify for recognition as held for trading, thu investment in equity securities measured at fair value through other comp

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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FVPL vs. FVOCI (election) Fact pattern for the next three items: Elements Co. had the following investment transactions: Dec. 3, 20x1 Acquired 12,000 shares of Buffet Corp. at P3.00 per share. Elements incurred P1,800 brokerage commission. Buffet Corp.'s shares have a quoted price of P5.00 per share. Dec. 31, 20x1 Jan. 16, 20x2 Elements Co. sold all the shares at P8.00 per share. Elements incurred sale transaction costs of P4,800. Prepare the journal entries assuming Elements Co. irrevocably elected to measure the investment at FVOCI. Elements Co. does not use a fair value adjustment account.
Less : Excess amount received on application Allotment 600 6,00,000 3,00,000 3,00,000 %3D %3D Balance Due Less: Amount not received from Subodh on Allotment Net amount received on allotment in Cash 600 2,99,400 (reces excess of 600 is exclusively for share capital and hence Securities Premium Reserve ILLUSTRATION 70. KS Ltd. invited applications for issuing 1,60,000 equity shares of 10 each at a premium of 76 per share. The amount was payable as follows : On Application On Allotment On First and Final Call Applications for 3,20,000 shares were received. Applications for 80,000 shares were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Jain holding 800 shares, failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the final call was made. Gupta who had applied for 1,200 shares failed to pay the…
Fair Value Journal Entries, Available-for-Sale Investments The investments of Steelers Inc. include a single investment: 8,900 shares of Bengals Inc. common stock purchased on September 12, Year 1, for $8 per share including brokerage commission. These shares were classified as available-for-sale securities. As of the December 31, Year 1, balance sheet date, the share price declined to $6 per share. a. Journalize the entries to acquire the investment on September 12 and record the adjustment to fair value on December 31, Year 1. Year 1 Sept. 12 Year 1 Dec. 31 b. How is the unrealized gain or loss for available-for-sale investments disclosed on the financial statements? Unrealized Gain (Loss) on Available-for-Sale Investments is reported in the of the
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PROBLEM V. On January 2, 2020, P Company acquired 80% interest in S Company for P4,125,000 cash. On this date, the outstanding ordinary share capital and accumulated profits of P Company and S Company are as follows: P Company S Company Ordinary share capital P2,250,000 P1,312,000 Share premium 1,500,000 Accumulated profits (losses) 5,250,000 3,187,500 There was no issuance of ordinary shares during the year. Noncontrolling interest is initially measured at fair value. Fair value of the following assets of S Company exceeded their book values as follows: Inventories, P210,000; Property and equipment (remaining useful life 10 years), P127,500. All other assets and liabilities are fairly valued. Goodwill if any is not impaired. On December 31, 2020, the two companies reported the following operating results: P Company S Company Net income P1,785,000 P975,000 Dividends paid 525,000 262,500 1. Compute for the consolidated shareholders' equity.
Pass necessary Journal Entries: • On 01-03-2019, company forfeited 200 equity shares of $8 each. Haidar did not pay $3 per share in respect of share final call. On 02-04-2019, company reissued forfeited shares at $7 per share which was purchased by Tabu. • On 10-07-2017, Company forfeited 350 equity shares of Alia of Face value of $10 each for non-payment of $3 per share on first call and $2 per share on second and the final call. On 12-8-2017, all 350 forfeited shares are reissued at $7 per share which were bought by Ranveer.
Jackie Inc. made the following capital transactions on a domestic share not listed in the exchangeJanuary 15 - purchased 25,000 shares at P16 eachJanuary 31 - purchased 10,000 shares at P20 eachMarch 1 - sold 20,000 of January 15 shares at P15 eachApril 25 - sold 8,000 of January 31 shares at P25 each On the return to be filed for the April 25 sale, what amount should be reflected in Item 11?
Balance Sheet Presentation of Available-for-Sale Investments During Year 1, its first year of operations, Galileo Company purchased two available-for-sale investments as follows: Security Shares Purchased Cost Hawking Inc. 860 $43,602 Pavlov Co. 2,330 61,512 Assume that as of December 31, Year 1, the Hawking Inc. stock had a market value of $60 per share and the Pavlov Co. stock had a market value of $48 per share. Galileo Company had net income of $337,400 and paid no dividends for the year ending December 31, Year 1. All of the available-for-sale investments are classified as current assets. a. Prepare the Current Assets section of the balance sheet presentation for the available-for-sale investments. Galileo Company Balance Sheet (selected items) December 31, Year 1 Assets Current Assets: $fill in the blank 6f30cb02405dfbc_2 Plus Unrealized Gain (Loss) on Available-for-Sale Investments fill in the blank 6f30cb02405dfbc_4 $fill…
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Construction Forms Corporation buys securities to be available for sale when circumstances warrant, not to profit from short-term differences in price and not necessarily to hold debt securities to maturity. The following selected transactions relate to investment activities of Construction Forms whose fiscal year ends on December 31. No investments were held by Construction Forms at the beginning of the year. 2016 Mar. 2 Purchased 1 million Platinum Gauges, Inc., common shares for $31 million, including brokerage fees and commissions. Apr. 12 Purchased $20 million of 10% bonds at face value from Zenith Wholesale Corporation. July 18 Received cash dividends of $2 million on the investment in Platinum Gauges, Inc., common shares. Oct. 15 Received semiannual interest of $1 million on the investment in Zenith bonds. 16 Sold the Zenith bonds for $21 million. Nov. 1 Purchased 500,000 LTD International preferred shares for $40 million, including brokerage fees and commissions. Dec. 31…
FVPL vs. FVOCI (election) Fact pattern for the next three items: Elements Co. had the following investment transactions: Dec. 3, 20x1 Acquired 12,000 shares of Buffet Corp. at P3.00 per share. Elements incurred P1,800 brokerage commission. Buffet Corp.'s shares have a quoted price of P5.00 per share. Dec. 31, 20x1 Jan. 16, Elements Co. sold all the shares at P8.00 per share. Elements incurred sale transaction costs of P4,800. 20x2 .uiue Prepare the journal entries assuming the investment is classified as held for trading securities and Elements Co. uses a fair value adjustment account.
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