PROBLEM 4: MULTIPLE CHO Fact pattern for the next six questions: On Jan. 1, 20x1, Golf Co. acquired P1,000,000 face amount, 10% bonds for P951,963. The principal is due on Jan. 1, 20x4 but interest is due annually. The effective interest rate is 12%. In 20x2, Golf Co changed its business model for managing financial assets. Golf Co only reports annually, every Dec. 31. The quoted prices are 103 on Dec. 31, 20x2 and 104 on Jan. 1, 20x3. 1. The bonds are reclassified from amortized cost to FVPL. How much is the gain (loss) on reclassification and where is that amount presented? a. 57,857 in P/L b. (43,292) in OCI c. 15,714 in P/L d. 57,857 in OCI 2. The bonds are reclassified from FVPL to amortized cost. What is the amount of premium or discount to be amortized over 615 the remaining life of the bonds subsequent to reclassification date? a. 40,000 premium b. 40,000 discount the c. 57,857 premium d. 57,857 discount 3 The bonds are reclassified from amortized cost to FVOCI. How much is the gain (loss) on reclassification and where is that amount presented? a. 57,857 in P/L b. (43,292) in OCI c. 57,857 in OCI d. 0 4. The bonds are reclassified from FVOCI to amortized cost. How much is debited to the amortized cost asset on reclassification date? a. 982,143 b. 992,667 c. 1,000,000 d. 1,040,000 S. The bonds are reclassified from FVPL to FVOCI. How much is debited to the FVOCI asset on reclassification date? a. 982,143 b. 992,667 c. 1,000,000 d. 1,040,000
PROBLEM 4: MULTIPLE CHO Fact pattern for the next six questions: On Jan. 1, 20x1, Golf Co. acquired P1,000,000 face amount, 10% bonds for P951,963. The principal is due on Jan. 1, 20x4 but interest is due annually. The effective interest rate is 12%. In 20x2, Golf Co changed its business model for managing financial assets. Golf Co only reports annually, every Dec. 31. The quoted prices are 103 on Dec. 31, 20x2 and 104 on Jan. 1, 20x3. 1. The bonds are reclassified from amortized cost to FVPL. How much is the gain (loss) on reclassification and where is that amount presented? a. 57,857 in P/L b. (43,292) in OCI c. 15,714 in P/L d. 57,857 in OCI 2. The bonds are reclassified from FVPL to amortized cost. What is the amount of premium or discount to be amortized over 615 the remaining life of the bonds subsequent to reclassification date? a. 40,000 premium b. 40,000 discount the c. 57,857 premium d. 57,857 discount 3 The bonds are reclassified from amortized cost to FVOCI. How much is the gain (loss) on reclassification and where is that amount presented? a. 57,857 in P/L b. (43,292) in OCI c. 57,857 in OCI d. 0 4. The bonds are reclassified from FVOCI to amortized cost. How much is debited to the amortized cost asset on reclassification date? a. 982,143 b. 992,667 c. 1,000,000 d. 1,040,000 S. The bonds are reclassified from FVPL to FVOCI. How much is debited to the FVOCI asset on reclassification date? a. 982,143 b. 992,667 c. 1,000,000 d. 1,040,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:PROBLEM 4: MULTIPLE CHOICE- COMIVinTIUNAL
Fact pattern for the next six questions:
On Jan. 1, 20x1, Golf Co. acquired P1,000,000 face amount, 10%
bonds for P951,963. The principal is due on Jan. 1, 20x4 but interest
is due annually. The effective interest rate is 12%. In 20x2, Golf Co.
changed its business model for managing financial assets. Golf Co.
only reports annually, every Dec. 31. The quoted prices are 103 on
Dec. 31, 20x2 and 104 on Jan. 1, 20x3.
1. The bonds are reclassified from amortized cost to FVPL. How
much is the gain (loss) on reclassification and where is that
amount presented?
a. 57,857 in P/L
b. (43,292) in OCI
c. 15,714 in P/L
d. 57,857 in OCI
2. The bonds are reclassified from FVPL to amortized cost. What
is the amount of premium or discount to be amortized over
615
the remaining life of the bonds
reclassification date?
a. 40,000 premium
b. 40,000 discount
subsequent
to the
c. 57,857 premium
d. 57,857 discount
3 The bonds are reclassified from amortized cost to FVOCI.
How much is the gain (loss) on reclassification and where is
that amount presented?
a. 57,857 in P/L
b. (43,292) in OCI
c. 57,857 in OCI
d. 0
4. The bonds are reclassified from FVOCI to amortized cost.
How much is debited to the amortized cost asset on
reclassification date?
a. 982,143
b. 992,667
c. 1,000,000
d. 1,040,000
. The bonds are reclassified from FVPL to FVOCI, How much is
debited to the FVOCI asset on reclassification date?
a. 982,143
b. 992,667
c. 1,000,000
d. 1,040,000
TUDI How much is
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