NESTLE Inc., invested its excess cash in equity securities during 2016. The business model for these investments is

to profit from trading on price changes.

(a) As of December 31, 2016, the equity investment portfolio consisted of the following:

Investment Quantity Cost Fair Value

Lj, Inc. 1,000 shares P45,000 P63,000

Polland Co. 2,000 shares 120,000 126,000

Alabang Corp. 2,000 shares 216,000 180,000

Total P381,000 P369,000

3. In the December 31, 2016, statement of financial position, what should be reported as the carrying amount of the

investment?

a. 369,000

b. 345,000

c. 381,000

d. 405,000

4. In the 2016 income statement, what amount should be reported as unrealized gain or loss?

a. Unrealized gain of P12,000

b. Unrealized loss of P12,000

c. Unrealized loss P36,000

d. Unrealized gain of P24,000