Question 4: The retroactive adjustment to the beginning balance of retained earnings to correct the initial carrying value of the investment in stocks include debit / (credit) amounting to? (Use negative sign if credit)

Question 4: The retroactive adjustment to the beginning balance of retained earnings to correct the initial carrying value of the investment in stocks include debit / (credit) amounting to? (Use negative sign if credit)

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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Question

Audit Notes:
• The changes in fair value were appropriately recognized in OCI.
• The journal entries pertaining to the market value adjustments was prepared by
the accountant in accordance with the following information:
Market
Unrealized
Year
Cost
Value
Gain / (Loss)
2020
GKKB
P25,250
P23,350
(P1,900)
ABC
32,450
33,950
1,500
2021
GKKB
P25,250
P24,950
(P300)
ABC
32,450
32,650
200
Question 4: The retroactive adjustment to the beginning balance of retained
earnings to correct the initial carrying value of the investment in stocks includes a
debit / (credit) amounting to? (Use negative sign if credit)
Question 5: The amount of unrealized gain or (loss) as of December 31, 2021
amounts to? (Use negative sign if loss)
Question 6: The total amount that should be taken to profit or loss for 2021 amounts
to? (Use negative sign if net expense)
Question 7: The investment in stocks account is overstated or understated by? (Use
negative sign if overstated)

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