1. What is the market value of Y Company ordinary on December 31, 2019? a. P 36,000 c. P 24,000 b. P 48,000 d. P 12,000
The investment accounts maintained by Dexter Company were shown below:
Available for Sale Securities - Y Company Ordinary
Date Particulars
01-01-2020 Beginning Balance, 3,000 shares 36,000
01-12-2020 2 for 1 share split ( market price after the share split is P7) 12,000
03-17-2020 Sold 1,000 shares at P8 8,000
10-01-2020 Purchased 2,000 additional shares of Y Ordinary
at P8 per share plus transaction costs of P0.50 per share 17,000
11-30-2020 Sold 1,000 shares at P8.50 8,500
12-31-2020 Adjustment to fair value (FV is P9.20 per share.) 6,700
Financial Assets at Fair Value through Profit or Loss 0 B Company
06-30-2020 Received a dividend of 1 share of B Company
ordinary for every 5 shares of Y Company Ordinary.
Market price on this date of B Company Ordinary is P2.50.
The shares have par value of P1. 1,000
09-10-2020 Sold 500 shares for P2.80 per share 1,400
12-31-2020 Adjustment to market; fair value is P3.20 per share 2,000
Additional Information:
• You traced the beginning balances to your prior year's working paper. The Unrealized Gain or Loss on Available for Sale Securities at January 1, 2020 had a credit balance of 6,000.
• Upon receipt of the shares as a result of the share split, the company credited Income from AFS for 12,000.
• The Company incurred and paid P500 transaction costs upon sale of 1,000 shares on March 17, charging this amount to Selling and Administrative Expenses.
• The Company credited dividend income for the shares of B Company ordinary received as dividends. The shares were designated as FVPL.
• The Company received P0.80 per share cash dividends on Y Company ordinary on October 20, 2020. The shares were declared on September 20, payable to shareholders of record as of October 10. Upon receipt of the cash dividends, the company credited dividend income.
• On December 31, 2020, the company credited the adjustments to fair value to Gain on Investment. The total amount of 8,700 (P6,700 on Y Company ordinary and P2,000 on B Company ordinary) formed part of the balance of Other Operating Income on the company's draft of statement of comprehensive income.
1. What is the market value of Y Company ordinary on December 31, 2019?
a. P 36,000 c. P 24,000
b. P 48,000 d. P 12,000
2. What is the correct amount of the gain or loss on March 17 sale?
a. P 5,000
b. P 2,500
c. P 7,500
d. P 7000
3. What is the correct amount of gain or loss November 30 sale?
a. P 3,500
b. P 5,000
c. P 8,500
d. P 2,500
4. What is the total amount of dividend income on Y Company shares for the year 2020?
a. P 2,500
b. P 4,000
c. P 6,500
d. P 5,000
5. What is the unrealized gain or loss from the investments above taken as part of other comprehensive income in the profit or loss section of the statement of comprehensive income?
a. P 1,250
b. P 350
c. P 1,600
d. P 150
6. What is the unrealized gain or loss from the investments above taken as other comprehensive income as a result of the measurement to fair value at December 31, 2020?
a. P 19,800
b. P 17,000
c. P 18,200
d. P 15,800
7. What is the amount at which the AFS is shown on the December 31, 2020
a. 48,000
b. 51,000
c. 55,200
d. 61,640
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