Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 1 On January 1, 2021, Allan Co. purchased P400,000 bonds for P392,000. The bonds mature on January 1, 2025 and pay 12% annual interest

QUESTION 1

On January 1, 2021, Allan Co. purchased P400,000 bonds for P392,000. The bonds mature on January 1, 2025 and pay 12% annual interest beginning January 1, 2022. Transaction costs are negligible. The bonds were classified as held for trading securities. On December 31, 2021, the bonds are selling at a yield rate of 10%. How much is the unrealized gain (loss) recognized on December 31, 2021?  

QUESTION 2

On January 1, 2021, Rizzi Co. purchased 12,000 shares of Andre, Inc. for P400,000. Commission paid to broker amounted to P20,000. Management made an irrevocable choice to subsequently measure the shares at fair value through other comprehensive income. On December 31, 2021, the shares are quoted at P40 per share. On January 3, 2022, all of the shares were sold at P60 per share. Commission paid for the sale amounted to P24,000. How much is the unrealized gain (loss) recognized in profit or loss on December 31, 2021?

QUESTION 3

Caloy Co. bought 1,000 shares from Bayan Co. The shares have no active market, but an identical or similar asset has an active market. The identical asset, however, has multiple markets. Caloy determines that the identical asset has the following market values:

Market A Market B

Quoted price 500 600

Related transaction cost 25 150

How much is the fair valuation of the investment?

QUESTION 4

Information regarding Stone Co.’s portfolio of FVOCI securities is as follows:

Aggregate cost as of 12/31/03 170,000

Unrealized gains as of 12/31/03 4,000

Unrealized losses as of 12/31/03 26,000

Net realized gains during 2003 30,000

At December 31, 2002, Stone reported an unrealized loss of ₱1,500 in other comprehensive income to reduce these securities to market. Under the accumulated other comprehensive income in stockholders’ equity section of its December 31, 2003 balance sheet, what amount should Stone report?

Step by Step Solution

3.47 Rating (154 Votes )

There are 3 Steps involved in it

Step: 1

1 he unrealized gain loss recognized on December 31 2021 is 2789482 Explanation The bonds that are classified as the held for trading are recorded at ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cornerstones of Financial Accounting

Authors: Jay Rich, Jeff Jones

4th edition

978-1337690881, 9781337669450, 1337690880, 1337690899, 1337669458, 978-1337690898

More Books

Students also viewed these Accounting questions

Question

Rewrite the double inequality in its basic form. - 6 x+87

Answered: 1 week ago

Question

Discuss the roles of metacognition in learning and remembering.

Answered: 1 week ago