You are auditing the investments accounts of your client, Finter, Inc. for the year 2018. You noted that the following Investment in equity securities designated as fair value through other comprehensive income were properly reported at December 31, 2017 as follows: No. of shares Cost Market ALI convertible preference shares 20,000 1,400,000 1,440,000 SMC ordinary shares 35,000 4,725,000 5,145,000 The ff, transactions occurred during 2018; Jan 8 - Acquired 10,000 shares of AEV. designated as FVOCI at P550,000 cash. Additional P6,000 was paid for the brokerage fees and commissions. Feb 10 - Received the ff. dividends (declared on January 15, 2018 to stockholders of record January 20): SMC - 1,750 shares as share dividends; ALI PO.50 per preference share, AEV PQ.75 per share Mar 12 - Converted 5,000 shares of ALL preference shares into 10,000 shares of ALI ordinary shares. Jul 1- SMC issued share rights to ordinary shareholders for the purchase of 1 additional share at P150 for every three shares held. Oct 30- Finter exercised 80% of the stock rights. Nov 15 - Sold 30,000 shares of SMC stocks for P182 per share. Dec 1 - Received cash dividends of P1.50 per share on the SMC ordinary shares declared on November 2, 2018 to stockholders of record November 20. Market values for 2018 are obtained and listed below: SMC Feb- 10 150 SMC Jul-01 165 ex rights SMC Dec-31 172 ALI ordinary Mar-12 43 ALI preference Mar-12 76 ALI ordinary Dec-31 45 ALI preference Dec-31 83 AEV Dec-31 51 The journal entry upon exercise of share rights on October 30, 2018, would include a: O a. Debit Investments in Equity - FVOCI for 1,984,500SMC ordinary shares 35,000 4,725,000 5,145,000 The ff. transactions occurred during 2018: Jan.8 - Acquired 10,000 shares of AEV. designated as FVOCI at P550,000 cash. Additional P6,000 was paid for the brokerage fees and commissions. Feb 10 - Received the f. dividends (declared on January 15, 2018 to stockholders of record January 20): SMC - 1,750 shares as share dividends; ALL PO.50 per preference share; AEV P0.75 per share Mar 12 - Converted 5,000 shares of ALI preference shares into 10,000 shares of ALI ordinary shares. Jul 1- SMC issued share rights to ordinary shareholders for the purchase of 1 additional share at P150 for every three shares held. Oct 30- Finter exercised 80%% of the stock rights. Nov 15 - Sold 30,000 shares of SMC stocks for P182 per share. Dec 1 - Received cash dividends of P1.50 per share on the SMC ordinary shares declared on November 2, 2018 to stockholders of record November 20. Market values for 2018 are obtained and listed below: SMC Feb-10 150 SMC Jul-01 165 ex rights SMC Dec-31 172 ALI ordinary Mar-12 43 ALI preference Mar-12 76 ALI ordinary Dec-31 45 ALL preference Dec-31 83 AEV Dec-31 51 The journal entry upon exercise of share rights on October 30, 2018, would include a: O a, Debit Investments in Equity - FVOCI for 1,984,500 O b. Credit Stock Rights for 183,750 O c. Debit to Investments in Equity - FVOCI for P1,837,500 O d. Debit to Investments in Equity - FVOCI for 1,617,000
