14.On August 20X1, ABC Company bought 50,000 shares of Z Corp at P300,000. Commission and taxes related to the acquisition were P15,000. ABC designated the shares as held for trading. On Dec 31, 20X1 Z Corp's share had a fair value of P350,000 On Jan 12, 20X2, the shares were sold at P7.10 per share. Transaction costs related to the sale were P6,000. How much is the realized gain (loss) on sale? 0 (1,000) 5,000 (11,000)

14.On August 20X1, ABC Company bought 50,000 shares of Z Corp at P300,000. Commission and taxes related to the acquisition were P15,000. ABC designated the shares as held for trading. On Dec 31, 20X1 Z Corp's share had a fair value of P350,000 On Jan 12, 20X2, the shares were sold at P7.10 per share. Transaction costs related to the sale were P6,000. How much is the realized gain (loss) on sale? 0 (1,000) 5,000 (11,000)

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 1MC

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18.On August 20X1, ABC Company bought 10,000 shares of Z Corp at P120,000. Commission and taxes related to the acquisition were P5,000. On Dec 31, 20X1 Z Corp's share had a fair value of P14 per share. On Jan 4, 20X2 half of the shares were sold at P15 per share. Transaction costs related to the sale were P3,500. ABC Company's investment model is to hold collect and sell.How much is the gain (loss) on sale at Jan 20X2? 15,000 11,500 5,000 1,500
3.On August 20X1, ABC Company bought 50,000 shares of Z Corp at P300,000. Commission and taxes related to the acquisition were P15,000. ABC designated the shares as held for trading. On Dec 31, 20X1 Z Corp's share had a fair value of P350,000 On Jan 12, 20X2, the shares were sold at P7.10 per share. Transaction costs related to the sale were P6,000. How much is the unrealized gain at Dec 31, 20X1? 1,000 15,000 50,000 65,000
8.On August 20X1, ABC Company bought 10,000 shares of Z Corp at P120,000. Commission and taxes related to the acquisition were P5,000. On Dec 31, 20X1 Z Corp's share had a fair value of P14 per share. Half of the shares were sold at P15 per share. Transaction costs related to the sale were P3,500. ABC Company's investment model is to hold collect and sell.How much is the unrealized gain (loss) at FV change on Dec 31, 20X1? 20,000 15,000 10,000 0
11. On Jan 1, 20X1, ABC purchased 24,000 shares of XYZ for P200,000 and paid commission of P10,000 on the acquisition. ABC designated the investment to be measured at FVOCI. On Dec 31, 20X1, the shares were quoted at P20 per share. On Jan 10, 20X2 were sold for P30 per share incurring P12,000 transaction costs. What amount of gain (loss) should ABC recognize on Dec 31, 20x1 and Jan 10, 20X2 respectively? 270,000; 228,000 280,000; 228,000 280,000 282,000 293,000; 220,000
6. On January 1, 2020, PQR Company purchased 40,000 shares of Frank, Inc. at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000 were also paid by PQR. A P5 dividend per share was declared by Frank, Inc. on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. What is the initial measurement of the investment in Frank, Inc.?
2. On January 1, year 1, ABC Company purchased 80% of the stock of XYZ for P4,000,000 cash. Prior to the acquisition, XYZ had 100,000 shares of stock outstanding. On the date of acquisition, XYZ's stock had fair value of P52 per share. During the year, XYZ reported P280,000 in net income and paid dividends of P50,000. What is the balance in the noncontrolling interest account on ABC's balance sheet on December 31, year 1?
On January 1, 20x1, ABC Co. purchased 1,000 shares of XYZ, Inc. for ₱250,000. Commission paid to brokeramounted to ₱10,000. The equity securities were designated by management to be measured at fair valuethrough profit or loss. On December 31, 20x1, the shares are quoted at ₱200 per share. It was estimated thatthe transaction cost of ₱20 per share will be incurred if the shares were sold on that date. 1. How much is the unrealized gain (loss) on change in fair value recognized in the 20x1 profit or loss?2. On January 3, 20x2, all the shares were sold at ₱300 per share. Commission paid for the sale amountedto ₱60,000. How much is the realized gain (loss) from the sale?3. If ABC Co. uses an allowance account to account for changes in fair values, how much is the balance ofthis account on December 31, 20x1?
On January 1, 20X4, ABC Company acquired 100,000 ordinary shares of XYZ Company for P5,000,000. At the time of purchase, XYZ Company had 500,000 outstanding shares with a fair value and book value of P25 million. For the year ended December 31, 20X4, the following events took place: • XYZ reported net income of P1,800,000 for the calendar year 20X4. • ABC received from XYZ a dividend of P2.50 per ordinary share. • XYZ recognized unrealized gains of P600,000 on its financial assets at fair value thru other comprehensive income. • The market value of XYZ Company’s shares had temporarily decreased to P45 per share. ABC does have significant influence over XYZ. What is the carrying amount of the investment on December 31, 20X4? a. P4,500,000 b. P5,000,000 c. P5,230,000 d. P5,110,000
On January 1, 2022, Bumili Co, purchased 10,000 shares of Nabill, Inc. for P1,000,000 Commission and other charges paid amounted to P15,000 Management made an irrevocable choice to subsequently measure the shares at fair value through other comprehensive income. On December 31, 2022, the shares are quoted at P90 per share. On January 3, 2023, all of the shares were sold at P105 per share. Commission and other charges paid for the sale amounted to P16.000, How much is the unrealized gain (loss) recognized in Bumilis 2022 profit or loss?
On January 1, 2022, Bumili Co, purchased 10,000 shares of Nabill, Inc. for P1,000,000 Commission and other charges paid amounted to P15,000 Management made an irrevocable choice to subsequently measure the shares at fair value through other comprehensive income. On December 31, 2022, the shares are quoted at P90 per share. On January 3, 2023, all of the shares were sold at P105 per share. Commission and other charges paid for the sale amounted to P16.000, How much is the unrealized gain (loss) recognized in Bumilis 2022 profit or loss? A. P115,000 B. (P115,000) C. (P85,000) D. 0
On October 17, ORANGE Company issued 15,000 shares of its P100 par ordinary share in acquiring a land that has a fair value of P 1,700,000 during that date. The ordinary share is actively selling at P120 per share. On December 31, the land has a fair value of P2,100,000. At what amount should the Land be recorded in the books of Orange? *
On January 1, 20x4, the Alpha Company entered into a transaction for acquisition of assets and liabilities of Beta Company. Alpha issued P400 in long-term liabilities and 40 shares of ordinary shares having a par value of P1 per share but a fair value of P10 per share. Alpha paid P20 to lawyers, accountants and brokers for assistance in bringing about this purchase. Another P15 was paid in connection with stock issuance costs. Prior to these transactions, the balance sheets for the two companies were as follows: Item.. ..Alpha .Beta Cash.. P 180 ..P 40 Accounts Receivable...... 810..180 Inventory... 1,080.. 280 Land. . 600.. 360 Buildings (net).. .1,260.. 440 Equipment (net).. 480... 100 .....- Accounts Payable........( 450)..( 80) Long-term liabilities......(1,290)..( 400) Ordinary Shares, P1 par....( 330) Ordinary Shares, P20 par .( 240) Share Premium.. ( 1,080)..( 340) Retained Earnings.......(1,260).. ( 340) Note: Parentheses indicate a credit balance.