What amount of unrealized gain should Sisig Corp. report in its December 31, 2020 Statement of Financial Position?
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Sisig Corp. has 60,000 shares of Toyomansi ordinary share as EQUITY INVESTMENTS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME. These shares were acquired at fair market value, which was P80 per share on May 02, 2020. On December 20, 2020, the market value of these shares is P90/share. On December 22, 2020, Sisig Corp. sold 42,000 shares of its investment in Toyomansi for P92/share, which is the current quoted price also in the market, and incurred commission expense of P8,000. Market value of Toyomansi’s stock has increased by P3 per share by year-end. The company’s policy is to derecognize the related amount in the OCI whenever the EI@FVTOCI was disposed.
What amount of unrealized gain should Sisig Corp. report in its December 31, 2020
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- On January 1, 2020, Alice Company purchased 40,000 shares of Jasper at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000. A P5 dividend per share of Jasper had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. No other transactions occurred in 2020 affecting the investment in Jasper's share. What is the initial measurement of the investment?Dahlia Company has 35,000 ordinary shares of Amelie Corporation as an investment in equity securities through other comprehensive income. These shares were acquired at fair value, which was P43 per share on July 1, 2019. On December 31, 2019, the market value of these shares is P50 per share. Dahlia Company sold 15,000 shares of its investment in Amelie Corporation on January 28, 2020 for P60 per share. What amount of realized gain should Dahlia Company recognize in selling these shares?On June 1, 2020, Ping Corp. purchased 10,000 of Pong's 50,000 outstanding shares at a price of P6.00 per share. Pong had earnings of P3,000 per month during 2020 and paid dividends of P10,000 on March 1, 2020 and P12,500 on December 1, 2020. The fair value of Pong's shares was P6.50 per share on December 31, 2020. Which statement is correct? O Assuming that the investment is FVTPL, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P2,500 O Assuming that the investment is FVTOCI, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P7,500. O Assuming that the investment is an associate, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P3,600. O After all closing entries for 2020 are completed, the effect of the increase in fair value on total shareholders' equity would be the same amount under the FVTOCI and FVTPL approaches.
- On May 1, 2020, Bear Inc. acquired 1,250 shares of cub Ltd. for $60,000. This investment represents a 14% interest in Cub Ltd. Bear Inc. has classified this investment as FVTLP. On December 31, 2020, Cub Ltd. paid a $50,000 dividend to its shareholders. At June 30, 2021, Cub Ltd.'s shares were valued at $40 per share and Cub Ltd. reported a net loss of $20,000 for the year. On September 15, 2021, Bear Inc. sold the shares for $90,000. Both Bear Inc. and Cub Ltd. have June 30, 2021 year-ends. Prepare dated journal entries for the investment on acquiring the company's books from acquisition to disposal. Ignore income taxes. Journal entry descriptions are optional.On January 1, 2020, Lovely Company paid P1,200,000 for 40,000 ordinary shares of Lonely Corporation which represent 25% investment in the net assets of Lonely. Lovely has the ability to exercise significant influence over Lonely. Lovely received a dividend of P3 per share from Lonely in 2020. The reported profit of Lonely for the year ended December 31, 2020 was P640,000. The balance of Lovely’s investment in Lonely at December 31, 2020 should be a. 1,480,000 b. 1,360,000 c. 1,240,000 d. 1,200,000Chicken Wings Company has 60,000 shares of Fried Chicken Company ordinary share as equity investments at fair value through other comprehensive income. These shares were acquired at fair market value, which was P80 per share on May 2, 2022. On December 20, 2022 the market value of these shares is P90/share. On December 22, 2022, Chicken Wings sold 42,000 shares of its investment in Fried Chicken Company for P92/share, which is the current quoted price also in the market, and incurred commission expense of P8,000. Market value of Fried Chicken’s stock has increased by P3 per share by year-end. The company’s policy is to derecognize the related amount in the OCI whenever the investment was disposed. How much was transferred to retained earnings upon sale?
- On July 1, 2021, JKJ Corporation purchased 100 common shares of JMK Ltd. at $20 per share. JKJ expected to be able to sell this investment within a year at $28 per share. Dividends of $1 per share were declared and paid on August 1, 2021. On December 31, 2021, the fair value of each share was $23. What balance was shown in the investment account on JKJ's balance sheet on December 31 (year end)? $2,300 $2,400 $2,000 $2,800On July 1, 2021, Matiyaga Company purchased 1,000 shares of Masipag Corp. P100 par ordinary shares (5% interest in voting rights) at P175 per share. Matiyaga also paid transaction cost of P3,500. The shares were designated as equity investments at fair value through other comprehensive income. On December 31, 2021, Masipag ordinary shares were quoted at P200 per share. What is the carrying value of Matiyaga’s equity investment at December 31, 2021? a.) P100,000 b.) P175,000 c.) P178,500 d.) P200,000On January 2, 2020, Theodora Company purchased40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities?a. P400,000 c. P200,000b. P280,000 d. P 80,000
- On December 31, 2020, Hazel Company held 1,000 ordinary shares of X Co. in its portfolio of long-term investments in equity securities. The shares were designated as at fair value through other comprehensive income. The shares had a cost of P150 per share and had a fair value of P130 per share at December 31, 2020. During 2021, Hazel acquired the following investments, all of which were designated as at fair value through other comprehensive income: 900 ordinary shares of Y Co. for P180 per share and 800 ordinary shares of Z Co. for P220 per share. At the end of 2021, market values per share were: X - P140; Y - P170; Z - P200. What is the net unrealized loss account balance reported in the stockholders' equity section of Hazel Company's statement of financial position at December 31, 2021? (A) PO B) P15,000 P20,000 D) P35,000On December 31, 2020, Hazel Company held 1,000 ordinary shares of X Co. in its portfolio of long-term investments in equity securities. The shares were designated as at fair value through other comprehensive income. The shares had a cost of P150 per share and had a fair value of P130 per share at December 31, 2020. During 2021, Hazel acquired the following investments, all of which were designated as at fair value through other comprehensive income: 900 ordinary shares of Y Co. for P180 per share and 800 ordinary shares of Z Co. for P220 per share. At the end of 2021, market values per share were: X - P140; Y - P170; Z - P200. The adjusting entry on December 31, 2021 would (A decrease unrealized loss by P20,000. B increase unrealized loss by P15,000. increase unrealized loss by P35,000. (D decrease unrealized loss by P15,000.In the December 31, 2020, statement of financial position, what is the carrying amount of the investment in equity securities?On January 2, 2020, Megan, INC. acquired a 15% interest in Kiyosaki Corp. by paying P8, 000, 000 for 100,000 ordinary shares. On this date, the net assets of Kiyosaki Corp. totaled P40, 000, 000. The fair values of Kiyosaki Corp.'s identifiable assets and liabilities were equal to their book values. Megan did not have the ability to exercise significant influence over the operating and financial policies of Kiyosaki. Megan received dividends of P1.40 per share from Kiyosaki on October 1, 2020. Kiyosaki reported net income of P5, 000, 000 for the year ended December 31, 2020. Megan classified the investment as at fair value through other comprehensive income. Market price for the 100,000 shares was P9, 000, 000 on December 31, 2020.Megan paid P30, 000, 000 on January 1, 2021, for 300,000 additional Kiyosaki ordinary shares, which represents a 25% interest in…
