The Investments and Dividends Income accounts of Babe Time Company are shown below: Trading Securities Date Description Ref. Debit Credit 06/22/14 5,000 ordinary shares, par value P100, Bebe Co. CD – 28 520,000 12/31/14 Adjustment to fair value 80,000 05/31/15 500 shares Bebe Co. received as bonus issue GJ – 10 12,000 07/10/15 Sold 1,000 shares @ P130 net of transaction cost CR – 21 130,000 12/04/15 Sold 1,000 shares @ P140 CR – 40 140,000 Dividend Income Date Description Ref. Debit Credit 05/31/15 Bonus issue (stock dividend) GJ – 10 12,000 08/01/15 Cash dividend on Bebe Co ordinary shares CR – 22 22,500 The following information was obtained during your examination: The December 31, 2014 statement of financial position of Babe time Company showed, among current assets, Trading Securities of P600,000. You obtained the following information relating to dividends declared by Bebe Company. Type of Dividend Date declared Date of record Date of payment Rate Share 04/16/15 05/10/15 05/29/15 10% Cash 06/16/15 07/16/16 07/31/15 P5 per share Cash 12/10/15 12/28/15 01/16/16 P10 per share Closing market quotation is P85 as at December 31, 2015. QUESTIONS: Based on the above date and result of the audit, compute the following: 1. Gain or loss on the July 10 sale NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) 10,009 B. 5,909 C. 20,909 D. 15,909 2. Gain or loss on the December 4 sale NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) A. 20,000 B. 10,000 C. 20,909 D. 30,909 3. Dividend revenue for the year 2015 4. Unrealized gain or loss taken to profit or loss at December 31, 2015 NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) A. 84,318 B. 175,000 C. 62,500 D. 184,318
33.
The Investments and Dividends Income accounts of Babe Time Company are shown below:
|
Trading Securities |
||||
|
Date |
Description |
Ref. |
Debit |
Credit |
|
06/22/14 |
5,000 ordinary shares, par value P100, Bebe Co. |
CD – 28 |
520,000 |
|
|
12/31/14 |
Adjustment to fair value |
|
80,000 |
|
|
05/31/15 |
500 shares Bebe Co. received as bonus issue |
GJ – 10 |
12,000 |
|
|
07/10/15 |
Sold 1,000 shares @ P130 net of transaction cost |
CR – 21 |
|
130,000 |
|
12/04/15 |
Sold 1,000 shares @ P140 |
CR – 40 |
|
140,000 |
|
Dividend Income |
||||
|
Date |
Description |
Ref. |
Debit |
Credit |
|
05/31/15 |
Bonus issue (stock dividend) |
GJ – 10 |
|
12,000 |
|
08/01/15 |
Cash dividend on Bebe Co ordinary shares |
CR – 22 |
|
22,500 |
The following information was obtained during your examination:
- The December 31, 2014
statement of financial position of Babe time Company showed, among current assets, Trading Securities of P600,000.
- You obtained the following information relating to dividends declared by Bebe Company.
|
Type of Dividend |
Date declared |
Date of record |
Date of payment |
Rate |
|
Share |
04/16/15 |
05/10/15 |
05/29/15 |
10% |
|
Cash |
06/16/15 |
07/16/16 |
07/31/15 |
P5 per share |
|
Cash |
12/10/15 |
12/28/15 |
01/16/16 |
P10 per share |
- Closing market quotation is P85 as at December 31, 2015.
QUESTIONS: Based on the above date and result of the audit, compute the following:
1. Gain or loss on the July 10 sale
NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)
|
|
10,009 |
|
B. |
5,909 |
|
C. |
20,909 |
|
D. |
15,909 |
2. Gain or loss on the December 4 sale
NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)
|
A. |
20,000 |
|
B. |
10,000 |
|
C. |
20,909 |
|
D. |
30,909 |
3. Dividend revenue for the year 2015
4. Unrealized gain or loss taken to profit or loss at December 31, 2015
NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)
|
A. |
84,318 |
|
B. |
175,000 |
|
C. |
62,500 |
|
D. |
184,318 |
5. Adjusted balance of the investment account at December 31, 2015
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