Reference no: EM132584301
Question 1. On January 1, 2018, ABC Company has investment in equity designated as at FVOCI with a fair value of P600,000. These securities were acquired a year ago at a cost of P625,000. On March 31,2018, ABC exchanged these securities for a piece of land from mars company. The carrying amount of the land in books of Mars Company was P480,000 and has a zonal value of P800,000. At the time of exchange, the shares, which was publicly listed, has a fair value of P650,000.
Compute for the gain on exchange to be recognized in 2018 equity
Option 1: P50,000
Option 2: Answer not given
Option 3: P0
Option 4: P170,000
Option 5: P25,000
Question 2. During 2017, ABC Company purchased marketable equity securities as investment. These securities are classified as FVOIC. The cost and market value at December 31, 2017, were as follows:
Security Cost Fair Value
A-100 shares 2,800 3,400
B-1,000 shares 17,000 15,300
C-2,000 shares 31,500 29,500
ABC sold 1,000 shares of Company B stock on January 31, 2018 for P15 per share, incurring P1,500 brokerage commission and taxes. On the sale, Rex should report a realized loss of
Option 1: P3,500
Option 2: Answer not given
Option 3: P1,800
Option 4: P300
Option 5: P2,000
Question 3. On January 1,2016, ABC Company purchased 100,000 ordinary shares at P80 per share to be classified as nontrading through other comprehensive income.
On September 30, 2016, the entity received 100,000 stock rights to purchase an additional 100,000 shares at P90 per share. The stock rights had an expiration date of February 1,2017.
On September 30, 2016, each share had a market value of P114 and the stock right had a market value of P6.
What amount should be reported on September 30,2016 as investment in stock rights?
Option 1: P 100,000
Option 2: P 500,000
Option 3: P 400,000
Option 4: P 600,000
Option 5: Answer not given
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