Reference no: EM132892437
Bloom Corporation acquired 30% of Gloom Company's 100,000 voting stock on January 2, 2021 for P2,000,000 when the net assets of Gloom Company was P6,000,000. Gloom earned P1,000,000 and P1,500,000 in 2021 and 2022, respectively. Gloom Company paid dividends of P300,000 in 2021 and P500,000 in 2022. Market value of Gloom's ordinary shares is P80 and P90 per share for 2021 and 2022, respectively.
Problem 1: Assuming, Bloom sold 40% of its investment in Gloom Company on January 2, 2022 at the prevailing fair value of securities, what total amount should Bloom Company report in its 2022 profit or loss?
a) P 76,000 c) P156,000
b) P145,000 d) P190,000
Problem 2: If after the sale (Problem 1), Bloom Company reclassified its remaining investment to FVPL, what amount of unrealized gain or loss should be reported in its December 31, 2022 statement of financial position?
a) None c) P234,000
b) P180,000 d) P294,000
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