On January 1, 2020, the Balading Corporation purchased marketable equity securities for P2,000,000. The company also paid commission, taxes and other transaction costs amounting to P50,000. Because the securities were acquired not for immediate trading, Balading exercised its option to take the change in fair value through other comprehensive income. The securities had the following fair values at December 31, 2020 and 2021, respectively: P1,750,000 and P2,100,000. No securities were sold during 2020 and 2021. What amount of unrealized gain or loss should be reported in the December 31, 2021 statement of financial position as a component of shareholders' equity? (A P250,000 cumulative unrealized loss B P200,000 cumulative unrealized loss P100,000 cumulative unrealized gain

On January 1, 2020, the Balading Corporation purchased marketable equity securities for P2,000,000. The company also paid commission, taxes and other transaction costs amounting to P50,000. Because the securities were acquired not for immediate trading, Balading exercised its option to take the change in fair value through other comprehensive income. The securities had the following fair values at December 31, 2020 and 2021, respectively: P1,750,000 and P2,100,000. No securities were sold during 2020 and 2021. What amount of unrealized gain or loss should be reported in the December 31, 2021 statement of financial position as a component of shareholders' equity? (A P250,000 cumulative unrealized loss B P200,000 cumulative unrealized loss P100,000 cumulative unrealized gain

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

On January 1, 2024, Everglade Company purchased the following debt securities and properly accounted for them as securities available-for-sale: Security Cost Fair Value, 12/31/2024 ABC $ 58,000 $ 74,800 DEF 91,800 83,000 XYZ 34,000 39,800 All declines in value are considered temporary. What amount should the Everglade Company report relative to these securities in its 2024 statement of other comprehensive income? Multiple Choice $0. $22,600 unrealized holding gain. $13,800 net unrealized holding gain. $8,800 unrealized holding loss.
On its December 31, 2021, statement of financial position, Apollo Co. reported its investment in equity securities at fair value through other comprehensive income, which had cost P600,000, at fair value of P550,000. At December 31, 2022, the fair value of the securities was P585,000. What should Apollo report on its 2022 income statement as a result of the increase in fair value of the investments in 2022? Unrealized loss of P15,000. O Unrealized gain of P35,000. Realized gain of P35,000. О РО.
Some of Cullumber Lake Limited's investment securities are classified as trading securities and some are classified as non- trading. The cost and fair value of each category at December 31, 2020, were as follows. Trading securities Nokn-trading securities Cost ¥96,500 ¥59,500 Fair Value ¥85,000 $64,000 Unrealized Gain (Loss) ¥(11,500 ) ¥4,500 At December 31, 2019, the Fair Value Adjustment-Trading account had a debit balance of ¥2,600, and the Fair Value Adjustment-Non-Trading account had a credit balance of ¥6,200. Prepare the required journal entries for each group of securities for December 31, 2020.
On 1 July 2019, Silver Ltd, a reporting entity, acquired all of the issued shares of Brumby Ltd. As part of the settlement, Silver Ltd agreed to pay $1,700,000 on 1 July 2019 and $1,284,000 payable on 1 July 2020. The appropriate discount rate was 7% per annum. Silver Ltd also issued 475,000 shares of Silver Ltd to the shareholders of Brumby Ltd. At acquisition date, the fair value of the ordinary shares of Silver Ltd were $2.50 and the fair value of the ordinary shares of Brumby Ltd were $3.00. Brumby Ltd's shareholders' equity on 1 July 2019 consisted of the following: Issued capital $1,900,000 Retained earnings $650,000 Total shareholders' equity $ 2,550,000 At 1 July 2019, all of Brumby Ltd's net assets were recorded at fair value, except the following items: Carrying Amount Fair Value Machinery $1,120,000 $1,400,000 Brumby Ltd purchased the plant for $1,500,000. On 1 July 2019, the plant had an estimated remaining useful life of 7 years with zero residual value. Brumby Ltd is…
On January 1, 2020, the Stew Corporation purchased equity securities to be held for trading purposes for $2,000,000. The company also paid commissions, taxes and other transaction costs amounting to $50,000. The securities had fair values at December 31, 2020 and 2021, respectively: $1,750,000 and $2,100,000. No securities were sold during 2020. What amount of unrealized gain (loss) should be reported in the 2020 profit or loss section of the statement of comprehensive income?
On Jan. 1, 2021, an entity bought investment in bonds and classified it as an investment at amortized cost. It has a total face value of P5,000,000 and an acquisition cost of P5,088,700. It pays an interest rate of 6%, to be paid semiannually every June 30 and Dec. 31. It matures on Dec. 31, 2024. The acquisition resulted to an effective interest rate of 5.5%. On Dec. 31, 2021, the bonds have a total fair value of P5,010,000. what is the Investment in Bonds as of acquisition?
During the year 2021 Azimuth Corporation engaged in the following transaction with marketable securities:May 14: Azimuth purchases as a short-term investment 1,000 shares of ADIDAS. Azimuth paid €197.15 per share, plus a brokerage commission of €240. August 27: Azimuth sells 100 shares of its ADIDAS stock for €197.81 per share, less a €102 brokerage commission.October 10: Azimuth receives a €3.40 per share dividend on its ADIDAS shares.December 31: ADIDAS stock has a current market value of €198.12 per share. 3.1 Record the above four transactions in general journal.3.2. Define marketable securities. What characteristics of these securities justify classifying them as financial assets?
At the end of 2018, Terry Company prepared the following schedule of investments in available-for-sale debt securities (all of which were acquired at par value): Company Amortized Cost 12/31/18 Fair Value Cumulative Change in Fair Value Morgan Company $35,000 $34,200 $(800) Nance Company 50,000 53,100 3,100 Totals $85,000 $87,300 $2,300 During 2019, the following transactions occurred: July 1 Purchased Oscar Company debt securities with a par value of 100,000 for $98,000. The securities carry an annual interest rate of 10%, mature on December 31, 2021, and pay interest seminannually on July 1 and December 31. Terry uses the straight-line method to amortize any discounts or premiums. Oct. 11 Sold all of the Morgan Company securities for $33,000 plus interest of $1,300. Dec. 31 Received interest of $6,000 on the Nance Company and Oscar Company debt securities, and the following yearend total market values were available: Nance Company debt securities, $55,000; Oscar…
Strawberry Corp. has various equity investment at fair value through profit or loss transactions during 2020 and 2021. The acquisition cost of all the securities in its portfolio during 2020 was P 532,000. At December 31, 2020 and December 31, 2021, the market values of these investments were P 541,000 and P 512,000, respectively. In 2022, all of these securities were sold for P 550,000. Assuming no other transactions are noted regarding these financial assets at fair value through profit or loss, what is the amount of unrealized gain/loss reported in the 2021 income statement relating to these securities? A. P 29,000 loss B. P 20,000 loss C. P 29,000 gain D. P 20,000 gain
SOFIA had investments in equity securities costing P1,000,000 that were classifies as investment in fair value thru other comprehensive income. On june 30, 2021, SOFIA decided to reclassify the investment as investment in fair value thru profit and loss. the investments' fair value was P985,000 at december 31, 2020 and P950,000 at june 30, 2021, and P1,500,000 at december 31, 2021 What amount of loss/gain from investments should Sofia report in 2021 income statement? Using the information above, what is the audited net unrealized loss/gain on marketable equity securities in its 2021 statement of shareholders’ equity?
At the beginning of 2021, Gala company purchased equity securities to held for trading for P5,000,000. The entity also paid commission, taxes and other transaction costs amounting to P200,000. The securities had a market value of P5,500,000 at year-end. No securities were sold during the year. In the year 2022, 60% of the investments were sold. Proceeds from the sale amounted to P3,450,000 which is net of transaction costs amounting to P125,000. On December 31, 2022, the fair value of the investment is 40% more than the carrying amount at the end of 2021. What total gain/loss on trading securities should be reported in the income statement for 2022?
Sandhill Inc. owns shares of Teal Corporation stock. At December 31, 2020, the securities were carried in Sandhill's accounting records at their cost of $916,000, which equals their fair value. On September 21, 2021, when the fair value of the securities was $974,000, Sandhill declared a property dividend whereby the Teal securities are to be distributed on October 23, 2021, to stockholders of record on October 8, 2021. Prepare all journal entries necessary on those three dates. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.) Date + ♦ Account Titles and Explanation (To record gain or loss) (To record property dividend) Debit Credit