1. On January 1, 2021, Dalipey Corporation owns 10,000 ordinary shares representing 10% of the shares outstanding of Poblacion Corporation. The ordinary shares were acquired on November 2, 2020 at a cost of P500,000 and have a fair value of P550,000 on December 31, 2020. On January 3, 2021, sold half of its investment for P48 per share incurring a brokerage and commission expense of 2,000.

Required: For each of case above

1. Compute for the following:
2. Unrealized gain or loss on December 31, 2020 to be presented in the SFP.
3. Gain or loss on January 2, 2021.
4. Necessary entries in 2020 and 2021.

1. Ambuclao Co. has the following trading securities

Investment in Luke Co.-Trading Securities

Date Acquired

No of Shares and Cost per Share

Total Cost

Jan 3, 2021

30,000 shares at P40

P1,200,000

March 3, 2021

20,000 shares at P45

900,000

April 3, 2021

50,000 shares at P50

2,500,000

Ambuclao Co. does not have significant influence over Luke. On May 1, 2021 Ambuclao sold 60,000 shares at P60 per share.

Required:

Determine the gain (or loss) on sale assuming

1. The company is using FIFO in valuing its securities.
2. The company is using weighted average method in valuing its securities.
4. On December 1 of the current year, Tuding Corporation owns 10,000 ordinary shares representing 10% of the shares outstanding of Loacan Corporation. During the same date Loacan declared P2 pers share dividends on ordinary shares to the shareholders of record on December 15 payable on December 31.

Required:

Necessary entries at the:

1. Date of declaration
2. Date of record
3. Ex-dividend date
4. Date of Payment
5. Virac Company owns 10% of the outstanding ordinary shares of Ampucao Corp. On November 1, 2020, Ampucao declared its inventory as property dividends to be distributed on February 15, 2021. Data relating to the fair values of the inventory follow:

Date

Total Fair Value of Property dividends

November 1, 2020

P600,000

December 31, 2020

800,000

February 15, 2021

780,000

Required:

Journal entries from the date of declaration to date of payment.

1. On October 1 of the current year, Datakan Corp. owns 10,000 shares acquired at a cost of P120,000. On the same date, Gadang Corp. declared 20% share dividends payable to stockholders on October 31. On October 1, the stock is selling at P12 per share. However, on October 31, Gadang Corp. gave P13 per share cash in lieu of the supposed 2,000 share dividends previously declared.

Required:

All the necessary entries during the current year assuming the investments are:

Case 1: Financial assets at FVTPL.

Case 2: Investment in equity securities designated as FVTOCI.

1. On October 1, Sagpat Corp. owns 10,000 shares at a cost of P120,000 classified a FVTOCI. On the same date, Madaymen Corp. declared P5 cash dividends onn its outstanding shares payable to stockholders on October 31. However, on October 31, Madaymen Corp. issued 1 share for every 4 shares held by the stockholders in lieu of the supposed cash dividends previously declared.

Required:

All the necessary entries during the current year assuming the investments are measured at fair value and on October 31, the stocks were selling at P21 per share.

1. Abatan Corp. owns 10,000 investment in equity securities acquired at a cost of P500,000. The shares represent 10% of the ordinary shares of Bangao Corporation.

Required:

Record the receipt of the share dividends on the Abatan's book under each of the assumption listed below.

Case No. 1: Assuming the shares are FVTPL

1. Abatan received 1,000 shares as share dividends. The fair value of the ordinary shares amounted to P54 per share.
2. Abatan received 600 preference shares as share dividends. Each preference share has a fair value of P100.

Case No. 2: Assuming the shares are FVTOCI

1. Abatan received 1,000 shares as share dividends. The fair value of the ordinary shares amounted to P54 per share.
2. Abatan received 600 preference shares as share dividends. Each preference share has a fair value of P100.