Reference no: EM132745982

EQUITY INVESTMENTS

On December 31, 2018, Pot Company has the following securities:

Investment                                     Cost Designation

Merlin Company (2,000 shares)        150,000 FVPL

Luisita Company (3,000 shares)      300,000 FVOCI

Tokyo Company (1,500 shares)     250,000 FVOCI

During 2019, Merlin Company declared and issued P2 per share cash dividend. Luisita Company also declared a 20% bonus issue. The market value of the shares is P90 per share and the par value is P50. Tokyo Company also declared a property dividend to its shareholders. The property has a cost of P1,000,000, carrying value of P800,000 and a fair value of P500,000.

At the end of 2019, the fair value of the shares are as follows:

Merlin Company shares-------P80 per share

Luisita Company shares-------P97 per share

Tokyo Company shares-------P150 per share

Problem 1. How much is the total net amount recognized in 2019 Profit or Loss?

a. P14,000

b. P568,000

c. P514,000

d. P0

e. no answer

Problem 2. How much is the equity investments measured at fair value in the current asset section of the statement of financial position as at December 31, 2019?

a. P160,000

b. P734,200

c. P676,000

d. P700,000

e. no answer