Answered: On its December 31, 2020, balance…

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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Question

On its December 31, 2020, balance sheet, Post Co. reported its investment in financial asset @ fair value through other comprehensive income, which had cost P360,000, at fair value of P330,000. At December 31, 2021, the fair value of the securities was 350,000. What should Post report on its 2021 income statement as a result of the increase in fair value of the investments in 2021?

Unrealized loss of P10,000

Unrealized gain of P20,000

Nil

Realized gain of P20,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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