Problem 2.In connection with your audit of the financial statements of the Glorious Company for the year 2020, the following available for sale securities and dividend Income accounts were presented to you:

DateDescriptionRefDebit Credit

Jan 8Purchased 20,000 ordinary shares

Par value P50 Bustos Co.VR 69P780,000

Mar 3010,000 shares Bustos Co. received

As share dividendCJ-30500,000

Apr.3Sold 10,000 shares at P25CR 44P150,000

Dec 2Sold 4,000 shares at P60Cr 65240,000

Dividend Income

DateDescriptionRefDebitCredit

Mar 30Share DividendSJ-8P500,000

Aug 30Bustos Co. ordinary CR-52100,000

From the following information was obtained during your examination

1.From independent sources, you determine the following dividend information:

Type of dividendDate DeclaredDate ofRecordDate of PaymentRate

Share2/14/20202/28/203/30/2050%

Cash8/1/208/15/208/30/20P5/share

Cash12/01/2012/15/201/02/2020%

2.Closing market quotation as at December 31, 2020:BidAsked

BUSTOS Company common13-3/416-12

Questions: Based on the above and the result of your audit, answer the following:

1.How much is the gain or loss on the April 3, 2020 sale?

a.P10,000 lossb.P10,000 gainc.P140,000 lossd.P0

2.How much is the gain on the December 2, 2020 sale?

a.P136,000b.P96,000c.P84,000d. P0

3.How much is the total dividend income for the year 2020?

a.P600,000b.P800,000c.P100,000d.P300,000

4.How much is the adjusted balance of Available for Sale Securities as of December 31, 2020?

a.P290,000b.P264,000c.P220,000d.P416,000

5.How much should the entity report as the net unrealized loss on Available for sale Securities at December 31, 2020 in accumulated other comprehensive income in equity?

a.P196,000b.P70,000c.P152,000d.P0