25. On January 1, 2023, Rachel Company acquired marketable securities classified as trading securities for P9,500,000. The entity also paid commission, taxes, and other transaction costs amounting to P350,000. The securities have a fair value of P9,800,000 on December 31, 2023. No securities were sold during the year. The transaction costs that would be incurred on the disposal of the investment are estimated at P100,000. What amount of unrealized gain or loss on these securities should be reported in the income statement for the current year? a. 50,000 unrealized loss b. 150,000 unrealized loss 200,000 unrealized gain C. 300,000 unrealized gain

25. On January 1, 2023, Rachel Company acquired marketable securities classified as trading securities for P9,500,000. The entity also paid commission, taxes, and other transaction costs amounting to P350,000. The securities have a fair value of P9,800,000 on December 31, 2023. No securities were sold during the year. The transaction costs that would be incurred on the disposal of the investment are estimated at P100,000. What amount of unrealized gain or loss on these securities should be reported in the income statement for the current year? a. 50,000 unrealized loss b. 150,000 unrealized loss 200,000 unrealized gain C. 300,000 unrealized gain

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...

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During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
At the beginning of 2021, Gala company purchased equity securities to held for trading for P5,000,000. The entity also paid commission, taxes and other transaction costs amounting to P200,000. The securities had a market value of P5,500,000 at year-end. No securities were sold during the year. In the year 2022, 60% of the investments were sold. Proceeds from the sale amounted to P3,450,000 which is net of transaction costs amounting to P125,000. On December 31, 2022, the fair value of the investment is 40% more than the carrying amount at the end of 2021. What total gain/loss on trading securities should be reported in the income statement for 2022?
At the beginning of 2021, Gala company purchased equity securities to held for trading for P5,000,000. The entity also paid commission, taxes and other transaction costs amounting to P200,000. The securities had a market value of P5,500,000 at year-end. No securities were sold during the year. In the year 2022, 60% of the investments were sold. Proceeds from the sale amounted to P3,450,000 which is net of transaction costs amounting to P125,000. On December 31, 2022, the fair value of the investment is 40% more than the carrying amount at the end of 2021. What total gain/loss on trading securities should be reported in the income statement for 2022? Answer should be presented as: LOSS 123456 or GAIN 123456
On January 1, 2018 Alexes Company purchased market marketable equity securities to be held as trading for 5,000,000. The entity also paid transaction cost amounting to P 200 000. The securities had a market value of 5 500 000 on December 31, 2018 and the transaction cost that would be incurred on sale is estimated at 100 000. No securities were sold in 2018. What amount of unrealized gain or loss on these securities should be reported in the 2018 income statement?
Z Corporation has the following transactions relating to its investment during 2020: Jan 5 Acquired 16,000 shares of Y company for P1,500,000 paying an additional P10,000 for brokerage and P5,000 for commission. Feb 14 Received dividends from Y company declared January 10,2020 to the stockholders of records January 31,2020, P16,000. Required:prepare all the necessary entries assuming the investment is 1. Financial asset at Fair Value through profit and loss 2. Financial asset at Fair Value through other comprehensive income
During 2020, Boston Company purchased marketable securities as a trading investment. For the year ended December 31, 2020, the entity recognized an unrealized loss of P230,000. There were no security transactions during 2021. The entity provided the following information on December 31, 2021: Trading security = A; Cost = 2,450,000; Market Value = 2,300,000. Trading security = B; Cost = 1,800,000; Market value = 1,820,000. In the 2021 income statement, what amount should be reported as unrealized gain or loss?
On its December 31, 2020, balance sheet, Trump Company reported its investment in equity securities, which had cost $600,000, at fair value of $560, 000. At December 31, 2021, the fair value of the securities was $585, 000. What should Trump report on its 2021 income statement as a result of the increase in fair value of the investments in 2021? a. 50. b. Unrealized loss of $15,000. c. Realized gain of $25, 000. d. Unrealized gain of $25,000.
6. On November 1, 2011, Ribbon Company invested in P600,000 in equity securities representing 20,000 ordinary shares of Carbon Company. Ribbon Company incurred transaction cost of P5,000 related to the acquisition of the security. On December 31, 2011 this investment has a market value of P580,000. On April 15, 2012, Ribbon Company sold the investment for P630,000. a. What amount of realized gain should Ribbon Company recognized on the disposal of the security assuming the security was classified as investment in profit or loss?
On January 1, 2020, the Soondubu Stew Corporation purchased equity securities to be held for trading purposes for P2,000,000. The company also paid commissions, taxes and other transaction costs amounting to P50,000. The securities had fair values at December 31, 2020 and 2021, respectively: P1,750,000 and P2,100,000. No securities were sold during 2020. What amount of unrealized gain (loss) should be reported in the 2020 profit or loss section of the statement of comprehensive income?Required to answer. Single choice. -P100,000 -P350,000 -(P250,000) -(P200,000)
On January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity securities qualify as a financial asset held for trading. The entity also paid P50,000 as commission to the broker. At year-end, the trading securities have a fair value of P6,000,000. The increase in fair value should be recorded with: a.A credit to Financial asset - FVPL, P1,000,000 b.A debit to Unrealized gain - OCI, P1,000,000 c.A debit to Financial asset - FVPL, P1,000,000 d.A debit to Unrealized gain - P/L, P1,000,000
At December 31, 2018, Hull-Meyers Corp. had the following investments that were purchased during 2018, itsfirst year of operations:Cost Fair ValueTrading Securities:Security A $ 900,000 $ 910,000Security B 105,000 100,000Totals $ 1,005,000 $ 1,010,000 Securities Available-for-Sale:Security C $ 700,000 $ 780,000Security D 900,000 915,000Totals $ 1,600,000 $ 1,695,000Securities to Be Held-to-Maturity:Security E $ 490,000 $ 500,000Security F 615,000 610,000Totals $ 1,105,000 $ 1,110,000No investments were sold during 2018. All securities except Security D and Security F are considered shortterminvestments. None of the fair value changes is considered permanent.Required:Determine the following amounts at December 31, 2018.1. Investments reported as current assets2. Investments reported as noncurrent assets3. Unrealized gain (or loss) component of income before taxes4. Unrealized gain (or loss) component of accumulated other comprehensive income in shareholders’ equity
28. On January 1, 2020, Walang Kayo Co. purchased investment securities for P1,500,000. The securities are classified as investment in equity securities at fair value through profit or loss. At December 31, 2016, the securities had a fair value of P2,100,000 but not yet been sold. The company also recognized a P400,000 restructuring charge during the year. The restructuring charge is composed of an impairment write down of manufacturing facility. Tax rules do not allow a deduction for the write down unless the facility is sold. The facility was not sold by the end of the year. After including the unrealized gain on the equity investment @FVPL and the restructuring charge, the accounting income before tax for the year was P5,000,000. The income tax rate for the current and future years is 30%. What is Walang Kayo’s current tax expense? A. P1,440,000 B. P1,500,000 C. P1,560,000 D. P1,920,000