An entity buys and sells securities expecting to earn profits on short-term differences in price. During 2016,
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Question:
An entity buys and sells securities expecting to earn profits on short-term differences in price. During 2016, the
entity purchased the following trading securities:
Security Cost Fair Value Dec. 31, 2016
A 195,000 225,000
B 300,000 162,000
C 660,000 678,000
Before any adjustments related to these trading securities, the entity had net income of P900,000.
1. What is the entity's net income after making any necessary trading security adjustments?
a. 900,000
b. 810,000
c. 762,000
d. 948,000
2. What would the net income be if the fair value of security B were P285,000?
a. 867,000
b. 900,000
c. 885,000
d. 933,000
Posted Date: