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?

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?

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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