The Gypsy Corporation has the following portfolio of investment securities (designated at fair value through other comprehensive income) at December 31, 2019. Purchase price Fair value 12/31/18 Dizon ordinary shares (5,000 shares) P225,000 P250,000 Monterey preference shares (3,500 shares) 133,000 140,000 Garcia ordinary shares (1,000 shares) 180,000 178,000 On April 30. 2020, Gypsy sold all the Dizon shares at P54 per share. In addition, on July 31, 2020, 3,000 Barney ordinary shares were acquired at P59. The December 31, 220 fair values were: Monterey, P135,000; Garcia, P190,000; and Barney, P200,000. Upon disposal of equity investments, unrealized gains and losses on equity investments sold is transferred to retained earnings. What should be the balance of Unrealized Gains and Losses that will be shown In the equity section of the December 31,2020 statement of financial position? a. P7,000 b. P30,000 c. P35,000 d. P60,000

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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The Gypsy Corporation has the following portfolio of investment securities (designated at fair value through other comprehensive income) at December 31, 2019.
Purchase price Fair value 12/31/18
Dizon ordinary shares (5,000 shares) P225,000 P250,000
Monterey preference shares (3,500 shares) 133,000 140,000
Garcia ordinary shares (1,000 shares) 180,000 178,000

On April 30. 2020, Gypsy sold all the Dizon shares at P54 per share. In addition, on July 31, 2020, 3,000 Barney ordinary shares were acquired at P59. The December 31, 220 fair values were: Monterey, P135,000; Garcia, P190,000; and Barney, P200,000.

Upon disposal of equity investments, unrealized gains and losses on equity investments sold is transferred to retained earnings.

What should be the balance of Unrealized Gains and Losses that will be shown In the equity section of the December 31,2020 statement of financial position?

a. P7,000

b. P30,000

c. P35,000

d. P60,000

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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