Tony Corporation recorded the following transactions for its investments during 2022:

May 22

Purchased 1,000 shares of Stark Corporation stock at P55 per share plus brokerage fees of P1,000 and classified the shares as FVTPL financial assets. Stark Corporation has 30,000 shares outstanding.

June 30

Received a cash dividend of P0.80 per share on Miller Corporation stock.

August 26

Sold 400 shares of Miller Corporation stock for P60 per share.

December 31

Miller common stock had a closing market price of P50 per share. The decline is considered to be temporary.

1.Given the information above, on May 22, Tony should :

a. Debit Fair Value through Profit or Loss Financial assets for P55,000

b. Debit Fair Value through Profit or Loss Financial assets for P56,000

c. Debit Cash for P56,000

d. Credit Cash for P55,000

2.Given the information above, on August 26, Tony should :

a. Credit Fair Value through Profit or Loss Financial assets for P22,000

b. Credit Gains on Fair Value through Profit or Loss Financial assets for P1,600

c. Credit Gains on Fair Value through Profit or Loss Financial assets for P2,000

d. Debit Dividend Revenue for P23,600

3.Given this information, the adjusting entry that Tony needs to make on December 31 is :

a. Valuation Adjustment for Fair Value through

Profit or Loss Financial assets 1,800

Losses on Fair Value through Profit

or Loss Financial assets 1,800

b. Losses on Fair Value through Profit

or Loss Financial assets 1,800

Valuation Adjustment for Fair Value through

Profit or Loss Financial assets 1,800

c. Valuation Adjustment for Fair Value through

Profit or Loss Financial assets 3,000

Losses on Fair Value through Profit

or Loss Financial assets 3,000

d. Losses on Fair Value through Profit

or Loss Financial assets 3,000

Valuation Adjustment for Fair Value through

Profit or Loss Financial assets 3,000