Reference no: EM133190134
Question 1 - On January 1, 2021, Knowl Company classified non-current assets as held for sale that had a carrying amount of P2,500,000. On this date, the assets are expected to be sold for P2,300,000. Reasonable and expected disposal cost to be incurred for sale was expected at P100,000. By December 31, 2021, the asset had not been sold and management after considering its options decided to place back the non-current asset into operations. On that date, Knowl Company's managers estimated that the non-current asset was now expected to be selling at P1,800,000 with the disposal cost of P50,000, while depreciation for 2021 was computed at P500,000 if the non-current asset was not classified as held for sale.
How much is the additional loss, related to the return of the asset to its original classification as non-current, shall be reported in the 2021 statement of comprehensive income?
a. P200,000
b. P450,000
c. P250,000
d. P-0-
Question 2 - Bergs Co. purchased the following equity securities on January 1, 2021 for a total amount of P360,000.
Nowl Co. preference shares P200,000
Knowie Co. ordinary shares 160,000
The shares did not qualify for recognition as held for trading, thus they were classified as investment in equity securities measured at fair value through other comprehensive income.
On December 31, 2021, the portfolio of Bergs Co. comprised the following: Nowl Co. preference shares- P240,000; Knowie Co. ordinary shares- P60,000
On December 31, 2022, the portfolio of Bergs Co. comprised the following: Nowl Co. preference shares- P220,000;Knowie Co. ordinary shares- P180,000
On February 2, 2023, all of the Nowl Co. preference shares were sold for P160,000 net of transaction costs.
How much is the unrealized gain (loss) recognized in other comprehensive income on December 31, 2021?
a. P(40,000)
b. P40,000
c. P0
d. P100,000
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