The Investments and Dividends Income accounts of Babe Time Company are shown below: Trading Securities Date Description Ref. Debit Credit 06/22/14 5,000 ordinary shares, par value P100, Bebe Co. CD – 28 520,000 12/31/14 Adjustment to fair value 80,000 05/31/15 500 shares Bebe Co. received as bonus issue GJ – 10 12,000 07/10/15 Sold 1,000 shares @ P130 net of transaction cost CR – 21 130,000 12/04/15 Sold 1,000 shares @ P140 CR – 40 140,000 Dividend Income Date Description Ref. Debit Credit 05/31/15 Bonus issue (stock dividend) GJ – 10 12,000 08/01/15 Cash dividend on Bebe Co ordinary shares CR – 22 22,500 The following information was obtained during your examination: The December 31, 2014 statement of financial position of Babe time Company showed, among current assets, Trading Securities of P600,000. You obtained the following information relating to dividends declared by Bebe Company. Type of Dividend Date declared Date of record Date of payment Rate Share 04/16/15 05/10/15 05/29/15 10% Cash 06/16/15 07/16/16 07/31/15 P5 per share Cash 12/10/15 12/28/15 01/16/16 P10 per share Closing market quotation is P85 as at December 31, 2015. QUESTIONS: Based on the above date and result of the audit, compute the following: Gain or loss on the July 10 sale NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) 10,009 B. 5,909 C. 20,909 D. 15,909 Gain or loss on the December 4 sale NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) A. 20,000 B. 10,000 C. 20,909 D. 30,909 Dividend revenue for the year 2015 Unrealized gain or loss taken to profit or loss at December 31, 2015 NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) A. 84,318 B. 175,000 C. 62,500 D. 184,318

The Investments and Dividends Income accounts of Babe Time Company are shown below: Trading Securities Date Description Ref. Debit Credit 06/22/14 5,000 ordinary shares, par value P100, Bebe Co. CD – 28 520,000 12/31/14 Adjustment to fair value 80,000 05/31/15 500 shares Bebe Co. received as bonus issue GJ – 10 12,000 07/10/15 Sold 1,000 shares @ P130 net of transaction cost CR – 21 130,000 12/04/15 Sold 1,000 shares @ P140 CR – 40 140,000 Dividend Income Date Description Ref. Debit Credit 05/31/15 Bonus issue (stock dividend) GJ – 10 12,000 08/01/15 Cash dividend on Bebe Co ordinary shares CR – 22 22,500 The following information was obtained during your examination: The December 31, 2014 statement of financial position of Babe time Company showed, among current assets, Trading Securities of P600,000. You obtained the following information relating to dividends declared by Bebe Company. Type of Dividend Date declared Date of record Date of payment Rate Share 04/16/15 05/10/15 05/29/15 10% Cash 06/16/15 07/16/16 07/31/15 P5 per share Cash 12/10/15 12/28/15 01/16/16 P10 per share Closing market quotation is P85 as at December 31, 2015. QUESTIONS: Based on the above date and result of the audit, compute the following: Gain or loss on the July 10 sale NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) 10,009 B. 5,909 C. 20,909 D. 15,909 Gain or loss on the December 4 sale NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) A. 20,000 B. 10,000 C. 20,909 D. 30,909 Dividend revenue for the year 2015 Unrealized gain or loss taken to profit or loss at December 31, 2015 NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A) A. 84,318 B. 175,000 C. 62,500 D. 184,318

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

Chapter15: Contributed Capital

Section: Chapter Questions

Problem 17E

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Question

The Investments and Dividends Income accounts of Babe Time Company are shown below:

Trading Securities
Date	Description	Ref.	Debit	Credit
06/22/14	5,000 ordinary shares, par value P100, Bebe Co.	CD – 28	520,000
12/31/14	Adjustment to fair value		80,000
05/31/15	500 shares Bebe Co. received as bonus issue	GJ – 10	12,000
07/10/15	Sold 1,000 shares @ P130 net of transaction cost	CR – 21		130,000
12/04/15	Sold 1,000 shares @ P140	CR – 40		140,000

Dividend Income
Date	Description	Ref.	Debit	Credit
05/31/15	Bonus issue (stock dividend)	GJ – 10		12,000
08/01/15	Cash dividend on Bebe Co ordinary shares	CR – 22		22,500

The following information was obtained during your examination:

The December 31, 2014 statement of financial position of Babe time Company showed, among current assets, Trading Securities of P600,000.

You obtained the following information relating to dividends declared by Bebe Company.

Type of Dividend	Date declared	Date of record	Date of payment	Rate
Share	04/16/15	05/10/15	05/29/15	10%
Cash	06/16/15	07/16/16	07/31/15	P5 per share
Cash	12/10/15	12/28/15	01/16/16	P10 per share

Closing market quotation is P85 as at December 31, 2015.

QUESTIONS: Based on the above date and result of the audit, compute the following:

Gain or loss on the July 10 sale

NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)

10,009

5,909

20,909

15,909

Gain or loss on the December 4 sale

NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)

20,000

10,000

20,909

30,909

Dividend revenue for the year 2015

Unrealized gain or loss taken to profit or loss at December 31, 2015

NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)

84,318

175,000

62,500

184,318

Adjusted balance of the investment account at December 31, 2015

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