Reference no: EM132770807

Question - On January 2, 2018, Karen Company owns 15,000 ordinary shares representing 15% of the shares outstanding of Klaire Company. The ordinary share were acquired on November 12, 2017 at a cost of Php 1,500,000 and have a fair value of Php 1,600,000 on December 31, 2017. On January 2, 2018, the company sold 50% of its investment for Php 100/share incurring brokerage and commission expense of Php 20,000

Required - Based on the above, answer the following:

1) Assuming that the above securities are classified as fair value through profit or loss:

a. What is the amount of unrealized gain (loss) on December 31, 2017 to be presented in the statement of financial position?

b. What is the amount of gain (loss) on sale on January 2, 2018 to be recognized in the profit or loss?

2) Assuming that the above securities are classified as fair value through other comprehensive income

a. What is the amount of unrealized gain (loss) on December 31, 2017 to be presented in the statement of financial position?

b. What is the amount of gain (loss) on sale on January 2, 2018 to be recognized in the profit or loss?