Year Cost Market Value Unrealized 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 7: The investment in stocks account is overstated or understated by? (Use negative sign if overstated)
Year Cost Market Value Unrealized 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 7: The investment in stocks account is overstated or understated by? (Use negative sign if overstated)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Year Cost Market Value Unrealized 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 7: The investment in stocks account is overstated or understated by? (Use negative sign if overstated)
![Problem 4 - PLM Company (PART 2)
Continued..
Investments in Stocks - This portfolio is composed of GKKB Company
shares (GanyankabakatigasBash) and ABC Company shares. The shares
were not held for trading and management has elected to designate the
investments at fair value through other comprehensive income.
Date
Debit Credit
Account
May 3,
2020
Investment in GKKB
Company
Broker's fee
25,250
1,000
Cash
26,250
To record the
acquisition of GKKB
shares and its related
transaction cost
Investment in ABC
Company
32,450
Cash
32,450](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8d64e1e2-8f46-4c1d-8563-66c197c77b93%2F10cb46c7-c864-4080-98da-26dd5cf1e6bd%2Fwzknyu_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 4 - PLM Company (PART 2)
Continued..
Investments in Stocks - This portfolio is composed of GKKB Company
shares (GanyankabakatigasBash) and ABC Company shares. The shares
were not held for trading and management has elected to designate the
investments at fair value through other comprehensive income.
Date
Debit Credit
Account
May 3,
2020
Investment in GKKB
Company
Broker's fee
25,250
1,000
Cash
26,250
To record the
acquisition of GKKB
shares and its related
transaction cost
Investment in ABC
Company
32,450
Cash
32,450
![To record the
acquisition of ABC
shares, acquired at
P32.45 per share
December Unrealized Gain / (Loss)
400
31, 2020
on market changes
Investment in ABC
Company
1,500
Investment in GKKB
1,900
Company
To record the market
value adjustment for
2020
May 28,
2021
Investment in ABC
Company
5,000
Dividend income
5,000
Received 100 shares of
ABC Company in lieu of
cash dividends of P5
per share. ABC shares
were seling for P42 per
share on this date.
December Unrealized Gain / (Loss)
100
31, 2021
on market changes
Investment in ABC
Company
300
Investment in GKKB
200
Company
To record the market
value adjustment for
2021
Audit Notes:
• The changes in fair value were appropriately recognized in OCI.
• The jourmal entries pertaining to the market value adjustments was
prepared by the accountant in accordance with the following
information:](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8d64e1e2-8f46-4c1d-8563-66c197c77b93%2F10cb46c7-c864-4080-98da-26dd5cf1e6bd%2Fl11r1y_processed.png&w=3840&q=75)
Transcribed Image Text:To record the
acquisition of ABC
shares, acquired at
P32.45 per share
December Unrealized Gain / (Loss)
400
31, 2020
on market changes
Investment in ABC
Company
1,500
Investment in GKKB
1,900
Company
To record the market
value adjustment for
2020
May 28,
2021
Investment in ABC
Company
5,000
Dividend income
5,000
Received 100 shares of
ABC Company in lieu of
cash dividends of P5
per share. ABC shares
were seling for P42 per
share on this date.
December Unrealized Gain / (Loss)
100
31, 2021
on market changes
Investment in ABC
Company
300
Investment in GKKB
200
Company
To record the market
value adjustment for
2021
Audit Notes:
• The changes in fair value were appropriately recognized in OCI.
• The jourmal entries pertaining to the market value adjustments was
prepared by the accountant in accordance with the following
information:
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