Reference no: EM132978722
Question 1. Hatton Inc. has equity investments at fair value through profit
or loss purchased during 20x4. At the end of 2014, the securities had total market value of P 525,000. As of December 31,20x5, the records show cost and market values as follows:
Investment Cost Market value
1 P 100,000 P 90,000
2 190,000 210,000
3 250,000 235,000
Find the gain or loss that would be reported in profit or loss as a result of the valuation of the securities at the end of 20x5.
Question 2. The following transactions appear on the Equity investments at fair value through profit or loss account of Chicker Corporation
Date Particulars Debit Credit
03/1/x6 Purchased 40,000 shares of PLDT at
P 30.75/share and 20,000 shares of Benpress at
P 23/share P 1,690,000
07/03/x6 Purchased PAG-IBIG 15% bonds, face value
P 4,000,000. Interest dates July 1 and Jan 1.
Maturity date July 1, 20x9 4,000,000
11/5/x6 Sold 14,400 shares of PLDT at P 30/share
And 4,000 shares of Benpress at P 25/share P532,000
12/31/x6 Sold PAG-IBIG bonds at 98 plus accrued interest 4,220,000
i. On October 1,20x6 Chicker received 8,000 shares of PLDT as stock dividend
ii. Benpress declared a 15% stock dividend to all stockholders of record as of November 15, 20x6 payable on December 1,20x6
Based on the data above, how much is the adjusted balance of Chicker's equity investments at fair value through profit or loss as of December 31, 2016?
How much is the average cost per share of PLDT's stocks as of December 31, 20x6?
How much is the average cost per share of Benpres stocks as of December 31, 20x6?
How much is the total gain / loss on sale of equity investments at fair value through profit or loss for the year 20x6?
Question 3. Maganda Company had the following transactions for 20x5:
a. On January 1, 20x5 Maganda Company purchased 1,500 shares (10% interest in voting shares) of Beautiful Company at P 100 per share plus transaction cost of P 5,000.
b. At year end, the Beautiful Company's ordinary shares had a fair value of P 125 per share.
c. In March 20x6, Beautiful Company distributed a 20% stock dividends and subsequently gave P 1.00 dividend per share.
d. In November 20x6, the investee corporation declared a 2 for 1 split .
e. In December 20x6 Maganda Company sold 500 shares at P65 per share
f. At year end of December 20x6, the Beautiful Company's ordinary shares had a fair value of P 75 per share.
Required: Prepare Journal Entries for each of the transactions above and compute for the balance of the Equity Investment that shall be reported in the Statement of Financial Position? How much shall be reported to the Profit and Loss Statement as a result of the transactions above.
Question 4. Use the data above but assume that 4,500 shares were purchased on January 1, 20x5 giving Maganda Company a 30% interest in Beautiful Company.
Required: Prepare Journal Entries for each of the transactions above and compute for the balance of the Equity Investment that shall be reported in the Statement of Financial Position? How much shall be reported to the Profit and Loss Statement as a result of the transactions above.