Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Chapter 2, Problem 21PC
(1)
To determine
Identify the effect of the following transactions on a firm using the analytical framework.
(2)
To determine
Identify the effect of the following transactions on a firm using the analytical framework.
(3)
To determine
Identify the effect of the following transactions on a firm using the analytical framework.
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Problem No. 5
DAP Company started operation on January 1, 2018 and acquired the following securities:
Trading Securities Portfolio
Abad Company
Aquino Company
Lacierda Company
Fair value
P2,400,000
2,600,000
1,900,000
Fair value
FVTOCI Portfolio
Coloma Company
Soliman Company
Villanueva Company
P3,050,000
2,725,000
1,875,000
No disposals were made during 2018. The fair values of the investment securities as of December 31,
2018 are as follows:
Trading Securities Portfolio
Abad Company
Aquino Company
Lacierda Company
Fair value
P2,380,000
2,600,000
1,870,000
Page |S/TOCI Portfolio
Coloma Company
Soliman Company
Villanueva Company
Fair value
P3,070,000
2,737,500
1,871,000
The following additional transactions happened in 2019:
On September 1, DAP Company sold its Aquino Company securities for P2,590,000.
On October 1, DAP Company exchanged it Soliman Company portfolio for a piece of land. The
carrying amount of the land was P1,937,500 an a zonal value of P2,777,500. At the time of…
REQUIRED:
(Round all numbers to the nearest RM)
(a) Prepare related journal entries to record the above transactions.
(b) Prepare an extract of the Statement of Profit or Loss and Other Comprehensive Income for the year ended 2017.
(c) Explain the general accounting and reporting rule for equity investment of held-for-trading and non-trading.
The following was reported by Church Financial in its December 31, 2024, financial statements:
Investments at FVTPL, December 31, 2023
Investments at FVTPL, December 31, 2024.
Investment income or (loss)
Additional information:
1.
2.
3.
$13,400
18,300
(600)
The investments at FVTPL are investments in equity securities held for trading purposes.
Investment income or loss consists of: holding gain on the FVTPL investments of $3,100, and loss on sale of the FVTPL
investments of $3,700.
The carrying amount of the FVTPL investment sold was $4,900.
Chapter 2 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
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