At the beginning of 2021, Gala company purchased equity securities to held for trading for P5,000,00O. 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
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- 10. On January 2, 2021, X Co. acquired all the ordinary share of Y Co. for P2,060,000. On that date, Y Co. reported the following stockholders’ equity account balances: Ordinary share P800,000, Share premium P620,000, accumulated profits P300,000. The assets and liabilities of Y Co had book values that were approximately equal to its fair values, except building that was undervalued by P400,000, and equipment that was overvalued by P120,000. The building that was undervalued has an estimated life of 20 years and the equipment with 5 years useful life. Prior to acquisition, Y Co. has unimpaired goodwill in the amount of P10,000. What is the amount of goodwill to be reported in the consolidated Statement of Financial Position?On April 5. 2023, Paul Company purchased P50 par, 10,000 ordinary shares of George Company at P80 per share. The shares are designated as equity investments at Fair value through other comprehensive income. On October 26, 2023, Paul received 10,000 rights to purchase an additional 2,000 shares at P90 per share. The share rights received had an expiration date of February 1, 2024. 12. Assuming that all of the share rights are exercised, at which time the market value per ordinary share was P98, what Is the total cost of the new Investment arising from the exercise of these rights? a. P196,000 b. P180,000 c. P160,000 d. P100,000 13. Refer to number 12, how much investment income should be recorded by Paul? a. P36,000b. P16,000c. P8,000d. P0On June 30, 2021, Peter, Inc. purchased the following shares at a total cost of P10,700,000 designated as FVPL investment: Number of shares Total fair value Faye Corp. 100,000 1,400,000 Barto Corp. 200,000 3,700,000 Kesha Corp. 400,000 5,600,000 At the end of the year, the fair values of the shares are as follows: Faye Corp. P17 Barto Corp. 21 Kesha Co. 11 On June 30, 2022, Peter sold 75% of its holdings in Kesha at P13 per share. How much is the realized gain on sale on FVPL to be reported in net income during 2022?
- 2. On December 31, 2020, DEF, Inc. holds 100,000 shares of Devin Company with market value of P15,250,000 and originally acquired at a total amount of P15,000,000. The investment is classified as fair value through profit or loss. On July 1, 2021, DEF, Inc. purchased 30,000 additional shares of Devin Company at P152.30/share. On December 31, 2021, a share of Devin Company has a fair value of P153/share. What is the gain (loss) from change in fair value to be recognized in profit or loss in 2021? (Indicate if gain or loss)4. A Co. acquired 60% of the outstanding ordinary shares of B Co. on January 2, 2022. A Co. acquired it at book value which is the same as its fair value at the date of acquisition. Statements of Comprehensive Income of A Co. & B Co. for 2022 are as follows: А Со. P218,750 131,250 P87,500 26,250 P61,250 В Со. P87,500 52,500 P35,000 13,125 P21,875 - 0 - P21,875 Net Sales Cost of Sales Gross Profit Operating Expenses Operating Income Dividend Revenue 14,000 P75,250 Net Income B Co. made sales to A Co. of P28,000 in 2021 and P42,000 in 2022. A Co. reported inventory on December 31, 2021 amounting to P17,500 of which 20% comes from B Co. and inventory on December 31,2022 amounting to P21,000 of which 30% comes B Co. A Co. uses 30% mark-up on cost and B Co. uses 25% mark-up on cost for their selling prices. A Co. & B Co. declared and paid dividends in 2022 amounting to P21,000 and P17,500, respectively. On January 1, 2022, B Co. has ordinary shares of P80,000; Share Premium of P30,000 and…On October 1, 2022, BFAR Corporation issued 20,000 shares of its P100 par ordinary shares to MJE Corporation for a tract of land. The ordinary shares had a fair market value of P190 per share on this date. The fair value of the land is P3,000,000. Compute the increase in share premium.
- On April 5. 2020, Paul Company purchased P50 par, 10,000 ordinary shares of George Company at P80 per share. The shares are designated as equity investments at Fair value through other comprehensive income. On October 26, 2020, Paul received 10,000 rights to purchase an additional 2,000 shares at P90 per share. The share rights received had an expiration date of February 1, 2021.1. How much is the income recognized upon receipt of share rights? a. P0 b. P10,000 c. P20,000 d. P 80,000 2. How much is the investment Income, assuming that all of the share rights are sold at its market value of P5 each? a. P50,000 b. P20,000 c. P10,000 d. P010. Temporcal Company owned P50.000 ordinary shares. These 50000 shores were purchased for P120 per shoare. On Augusi 30, 2020, the investee dis fributed 50,000 stock rights to the investor. The investor was entitied to buy one new share for P90 cash and tw o of these rights. On Augusi 30,2020, ecach share hasamarket value of P130 and each right had a market value of P20. VWhattotai cost should be recorded for the new shares fhat are acquired by exercising the rights? 2250.000 b. $250/00 3.050.000 d. 5,500,000 11. Horem Company invesied in shares of Silangan Company acquired as foilows: 2018 2019 Number of Shores 20.000 40,000 Cost 2.000.000 3,500,000On April 1, 2023, Dark Company purchased P50 par, 10,000 ordinary shares of Vader Company at P80 per share. The shares are designated as equity investments at fair value through other comprehensive income. On October 26, 2023, Dark received 10,000 rights to purchase an additional 2,000 shares at P90 per share. The share rights received had an expiration date of February 1, 2024. How much is the income recognized upon receipt of share rights?
- 57) A Co. acquired 60% of the outstanding ordinary shares of B Co. on January 2, 2021. A acquired it at book value which is the same as its fair value at the date of acquisition. Income statements of A and B for 2022 were as follows: A Net sales Cost of sales 525,000 P350,000 B P875,000 210,000 Gross profit 350.000 105,000 Operating expenses 140.000 52.500 87,500 Operating income Dividend income 245,000 56.000 Net income P301.000 P87.500 There was an upstream of sales of P112,000 in 2021 and P168,000 in 2022. The buying affiliate reported inventory on December 31, 2021 amounting to P70,000 of which 20% comes from the selling affiliate and inventory on December 31, 2022 amounting to PS4,000 of which 30% comes from the selling affiliate. A uses 30% markup on cost and B uses 25% markup on cost for their selling prices. A and B declared and paid dividends in 2022 amounting to P84,000 and P70,000 respectively. On January 1, 2022, B…Acquirer Company acquired all the outstanding shares of Acquiree Company by issuing 50,000 shares of its P10 par value ordinary shares on July 1, 2022. The fair value of Acquirer’s share was P15. Acquirer also incurred P20,000 for legal fees and P15,000 for printing and registering the new shares. At the date of acquisition, Acquiree had the following balances: Assets – P850,000; Liabilities – P180,000; Share Capital – P500,000; Share Premium – P150,000; and Retained Earnings – P20,000. The carrying values of the identifiable assets and liabilities of Acquiree were equal to their fair values except for accounts receivable which was understated by P7,500 and plant assets with fair value lower than carrying value by P75,000. Answer the following: a. How much is the Increase in the Assets of Acquirer? b. Assuming that Acquirer purchased the net assets of Acquiree, how much is the Increase in the Assets of Acquirer? c. How much is the Increase in the Equity of Acquirer?Acquirer Company acquired all the outstanding shares of Acquiree Company by issuing 50,000 shares of its P10 par value ordinary shares on July 1, 2022. The fair value of Acquirer’s share was P15. Acquirer also incurred P20,000 for legal fees and P15,000 for printing and registering the new shares. At the date of acquisition, Acquiree had the following balances: Assets – P850,000; Liabilities – P180,000; Share Capital – P500,000; Share Premium – P150,000; and Retained Earnings – P20,000. The carrying values of the identifiable assets and liabilities of Acquiree were equal to their fair values except for accounts receivable which was understated by P7,500 and plant assets with fair value lower than carrying value by P75,000.Assuming that Acquirer purchased the net assets of Acquiree, how much is the Increase in the Equity of Acquirer?