Reference no: EM132587667
On January 1, 2017, Entity A owns 15,000 ordinary shares representing 15% of the shares outstanding of Entity B. The ordinary shares were acquired on November 12, 2017 at a cost of 1,500,000 and have a fair value of 1,600,000 on December 31, 2017. On January 2,2018, Entity A sold half of its investment for 100 per share incurring a brokerage and commission expense of 20,000.
Question 1. Assume that the above securities are classified as FVPL, the gain or loss on sale of January 2, 2018 to be recognized in the profit or loss:
A. (50,000)
B. 0
C. (70,000)
D. 20,000
Question 2. Assume that the above securities are designated at fair value through other comprehensive income, the gain or loss on sale of January 2, 2018 to be recognized directly in the retained earnings is:
A. (50,000)
B. 0
C. (70,000)
D. 20,000
ABC sells a machine that is classified as PPE for P1,700,000. ABC pays the broker a 10% commission. Information on the machine is as follows:
Carrying amount P1,900,000
Revaluation surplus 400,000
Question 3. How much is the gain (loss) from the sale?
A. P30,000
B. (P30,000)
C. (P370,000)
D. (P200,000)
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