Reference no: EM132857597

Questions -

Q1. On January 1,2013 AIR Inc. acquired 10,000 ordinary shares of WILEY Inc. at P20/share with the intent of selling them in the near future to generate short-term gains or profits. AIR also paid transactions costs amounting to P50,000. The fair market values of Investment in Wiley are provided:

December 31, 2013 P300,000

December 31, 2014 P250,000

How much is the unrealized holding gain or loss to be presented in profit or loss by AIR for the year ended December 31, 2014?

a. P100,00 gain

b. P50,000 gain

c. P100,000 loss

d. P50,000 loss

Q2. On January 1,2013 , WIND Inc. acquired 20,000 preference shares of WAYNE Inc. at P15/share and irrevocably designated the investment at fair value through other comprehensive income. WIND Inc. paid broker fees and transfer taxes totaling P50,000. The fair market values of Investment in WAYNE are provided:

December 31, 2013 P300,000

December 31, 2014 P500,000

How much is the unrealized holding gain or loss to be presented in the other comprehensive income of Statement of Comprehensive Income for the year ended December 31, 2014?

a. P150,000 gain

b. P200,000 gain

c. P50,000 loss

d. P150,000 loss

Q3. Using the same data preceding number, how much is the cumulative unrealized holding gain or loss to be presented in the other comprehenive income of Statement of Financial Position as of December 31,2014?

a. P150,000 gain (credit)

b. P200,000 gain (credit)

c. P50,000 loss (debit)

d. P100,000 loss (debit)