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Find the gain on exchange to be recognized in equity

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Question - On January 1, 2016, Gabriel Company has investment in equity designated as at FVOCl with a fair value of P600,000. These securities were acquired a year ago at a cost of P625,000. On March 31, 2016, ABC exchanged these securities for a piece of land. The carrying amount of the land was P480,000 and has a zonal value of P800,000. At the time of exchange, the shares, which was publicly listed, has a fair value of P650,000.

1. Find the gain on exchange to be recognized in 2016 equity.

A. P50,000

B. P170,000

C. P25,000

D. P0

2. Find the necessary journal entry on March 31?

A. Debit to land, P650,000

B. Debit to loss on exchange, P25,000

C. Debit to financial asset - FVOCI, P600,000

D. Credit gain on exchange, P25,000

Reference no: EM132594452

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