Reference no: EM132835283

A Company had various equity investments transactions during 2018 and 2019. The acquisition cost of ail the securities in its portfolio during 2018 was P 532,000. At December 31,2018 and December 31,2019, the market value of these equityr investments were P 541,000 and P 512,000. Respectively. In 2020, half of these securities are sold for P 275,000. Market value of all the equity investments as of December 31,2020 is P 560,000.

Problem 1: Assuming the equity investments is classified at fair value through other comprehensive income and the company has a policy to transfer the cumulative unrealized gains & losses to retained earnings once the equity investment is derecognized, how much is the unrealized gains & losses on equity investments balance that shall be presented on the equity section as of December 31,2020?

Option 1: P 9,000 debit balance

Option 2: P 10,000 debit balance

Option 3: P 14,000 credit balance

Option 4: P 24,000 credit balance