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Determine the balances to be presented in the statement

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Question - On January 1, 2020, La Union Corporation had 30,000 ordinary shares of Cagayan Company acquired during 2019 for the total consideration of P1,800,000, including P30,000 directly attributable costs. On December 31, 2019, the Cagayan shares were selling at P65 per share. In July 2020, La Union Corporation received a 20% bonus issue. Subsequently, it sold 15,000 shares at P70 per share. Market value of Cagayan ordinary at December 31, 2020 was P72 per share.

Required -

1. Give all entries relating to the foregoing for 2020 if the investment are designated at (a) Fair Value through Profit or Loss and (b) Fair Value through Other Comprehensive Income (Assume that the company has the policy of transferring to retained earnings the cumulative balance in equity as a result of measuring the fair value of OCI, when the investment is derecognized.)

2. Determine the balances to be presented in the statement of comprehensive income and statement of financial position as of December 31, 2020.

Reference no: EM132957440

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