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with solutions PROBLEM 2 Fair Value through Other Comprehensive Income | At December 31, 2017, BAGCPARS Company properly reported as noncurrent assets the following Fair

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PROBLEM 2 Fair Value through Other Comprehensive Income | At December 31, 2017, BAGCPARS Company properly reported as noncurrent assets the following Fair Value through Other Comprehensive Income equity securities: Market Cost Value EDA Corporation 1,000 shares, preference share P 40,000 P 30,000 DJOA, Inc. 6,000 shares of ordinary share 60,000 90,000 RVFE Co., 2,000 shares of ordinary share 55.000 88.000 Totals P155.000 P208,000 Page 4 of 6 During 2018, the following transactions Occurred among others: Acquired 8,000 shares of ARP Co. for P880,000 incurring additional P10,000 for brokerage and Jan 5 another P10,000 for commission. These shares are to be initially recognized at fair value through other comprehensive income. Feb 14 Received dividends from ARP Co. declared January 4, 2018 to the stockholder of record February 1, 2018, P16,000. Exchanged 500 EDA's shares for a piece of land from EDU. The carrying amount of the land on Mar 31 the book of EDU was P50,000 and its zonal value of P80,000. At the time of exchange, the shares, which was publicly listed, has a fair value of P65,000. Jun 1 Sold 500 shares of RVFE, after a 10% stock dividend (bonus share) was received, for P35 per share. Exchanged a land for a 1,000 ordinary shares of LCC Company. These shares shall be initially Jun 15 recognized at fair value through other comprehensive income. At the time of exchange, the shares, which was publicly listed, has a fair value of P50,000. The land was acquired a year ago at a cost of P20,000. The land has a fair value of P40,000 Oct 18 Sold 2,500 shares of DJOA Inc. for P40,000. Commissions and taxes for P5,000 were paid for the sale. Nov 15 Received dividends of P2 per share from DJOA Inc. declared on October 16, 2018 to the stockholders of record October 31, 2018. On December 31, 2018 the following are the available market values per share: EDA Corporation - preference share P50 DJOA. Inc. - ordinary share 15 RVFE 45 ARP Co. 100 LCC Co. 60 Based on the above and the result of your audit, determine the following: 1. The correct cost of investment acquired on January 5. The total dividend Income during the year. 3. The total net loss on sale of fair value through other comprehensive income securities 4. Total net gain or loss on exchange to be recognized in 2018 5. The total adjusted balance of the investment. --000

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