Chapter 6 Investments in Financial Instruments PDF

CHAPTER 6 – INVESTMENTS IN FINANCIAL INSTRUMENTS
Multiple Choice – Theories

1. B 2. A 3. B 4. D 5. C
6. A 7. B 8. C 9. B 10. D

Problem 1

A Corporation B Corporation C Corporation D Corporation E Corporation
Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount
Jan 3 1,000 54,000
8 1,000 60,000
Apr 5 (500) (27,000)
8 1,000 30,000 1,000 36,000
July 15 500 20,000
Dec 8 50
Bal.
before
adj to
FV 500 27,000 1,000 60,000 1.000 30,000 1,000 36,000 550 20,000
Adj 500 (6,000) 2,000 3,000 900
Per
audit 500 27,500 1,000 54,000 1,000 32,000 1,000 39,000 550 20,900

(a) Audit Adjusting Entries:

Financial Assets at FV through P&L 1,000
Dividend Income 1,000

Gain on Sale of FVPL 1,000

Treasury Shares 33,000

Treasury Shares 16,500
Paid in Capital from Treasury Shares 3,500



Dividend Receivable 5,000

SOLUTIONS TO INVESTMENTS IN FINANCIAL INSTRUMENTS
Financial Assets at FV through P&L 400

Unrealized Gain on FVPL 400

(b) (1) Carrying amount of FVPL (see worksheet above) P173,400
(2) Gain on sale of FVPL = 28,000 – 27,000 = P 1,000
(3) Dividend Income = 1,000 + 1,200 + 5,000 = P 7,200
(4) Unrealized gain or loss on FVPL P 400

Problem 2
1. Selling price on May 20 P21,000
Carrying value of shares sold 40,000 x 250/750 shares 13,333
Gain on Shares sold P7,667

2. Proceeds from sale P8,500
Dividends included (sold dividends on) = 100 x 10 (1,000)
Selling price without dividends P7,500
Carrying value 26,667 x 100/500 5,333
Gain on December 10 sale P 2,167

3. Dividend Income for the year 2012:
November dividends 500 shares x P 5 P2,500
Dividends on 100 shares sold (100 x P50 x 20%) 1,000
Dividends accrued on December 31 (400 x P50 x 20%) 4,000
Total dividend income P7,500

4. Adjusted balance of the investment account
shares Peso balance
Market value, January 1 500 P40,000
April 30 stock dividend 250
May 20 sale (250) (13,333)
Dec 10 sale (100) (5,333)
Balances before adjustment to market 400 21,334
Adjustment to market 12,466
Balance, December 31, at market 400 34,000

Adjusting Entries
Trading Securities 20,500

Gain on Sale of Trading Securities 7,667

Trading Securities (8,500 – 5,333) 3,167

Dividends Receivable 4,000
2

Trading Securities 12466
Unrealized Gain on Trading Securities 12,466
Problem 3
Investment in Creamy Company 135,000
Unrealized Gain /Loss on Equity Investments–
Other Comprehensive Income 135,000
12,000 x 65 = 780,000
780,000 – 645,000 = 135,000

Retained Earnings 24,000
Dividends accrued last year.

Investment in Creamy 6,000
Dividends included in the purchase price
of March 5 acquisition, acquired
dividends-‐on.

Unrealized Gain /Loss on Equity Investments 35,000
-‐ OCI
Selling price P360,000
Previous carrying value =
fair value on January 1
5,000 x 65 325,000
Unrealized gain – OCI P 35,000

*Unrealized Gain/Loss on Equity Investments – OCI 135,000
3,000 (72 – 35) + 2,000 (72-‐60) =135,000

Investment in Coffee 3,000
Property dividends should be recorded at
market. (1,000 x 4) – 1,000 = 3,000

Unrealized Gain/Loss on Equity Investments 25,000
-‐ OCI
Selling price = FV 1,000 x 90 = 90,000
Previous CV = FV, Jan. 1 = 65,000
Unrealized Gain 25,000

Miscellaneous Receivables 90,000
Investment in Creamy (1,000 x 90) 90,000

3
*Unrealized Gain/Loss on Equity Investments -‐ OCI 30,000

1,000 ( 90 – 60) = 30,000

Investments in Creamy 210,000
Unrealized Gain/Loss on Equity Investments 210,000
-‐ OCI
FV, 12/31/12 = 9,000 x 90 = 810,000
Previous CV :
Old = FV, Jan. 1
= 6,000 x 65 = 390,000
New= 3,000 x 70 = 210,000 600,000
Unrealized Gain – OCI 210,000

Unrealized Gain/Loss on Equity Investments -‐ OCI 500
Investment in Coffee 500
1,000 (3.50 – 4) = 500

Note to the Teacher: At the date of sale, the investments at fair value through other comprehensive
income are adjusted to fair value (presumed to be equal to the selling price on the date of sale). Thus, no
gain or loss on sale is recognized in profit or loss. The entry transferring the cumulative unrealized gain or
loss (equity account) to the retained earnings account is optional.

Problem 4
Financial Assets at FV through Profit or Loss
Red Corp Preference Red Corp. Ordinary Blue Ordinary Yellow Ordinary
Shares Peso amt Shares Peso amt Shares Peso amt Shares Peso amt
1/1/10 1,000 45,000 6,000 65,000 2,000 55,000
1/17 (2,500) (27,083)
2/14 200
6/01 (500) (12,500)
10/01 (500) (22,500) 1,500 30,000
Before adj. 500 22,500 1,500 30,000 3,500 37,917 1,700 42,500
Adj to
market 5,500 583 (5,100)
MV 12/31 500 28,000 1,500 30,000 3,500 38,500 1,700 37,400

Non-‐Current Investments
Investment in Associate – Green Company
Acquisition cost P1,600,000
Dividends received 100,000 x P0.50 x 4 (200,000)
Income from associate 25% x P1,200,000 300,000
Investment in Associate , 12/31/2012 P1,700,000

Gains and losses
On sale of Blue on January 17
Carrying value (P65,000 x 2,500/6,000 27,083
Gain on sale P 5,417
4

On sale of Yellow
Selling price 500 x P21 P10,500
Carrying value (P55,000 x 500/2200) 12,500
Loss on sale P 2,000

On conversion of Red Preference to Red Ordinary
Market value 500 x P60 P30,000
Carrying value P45,000 x 500/1000 22,500
Gain on exchange P 7,500

Dividend Income
On Red preference
April 6 1,000 x 1.20 P1,200
Oct, 6 1,000 x 1.20 1,200
On Blue ordinary
June 30 3,500 x P1 3,500
P5,900
Unrealized gains on FVPL (see above working papaer)
P5,500 + 583 – 5,100 = P 983

Income from Associate (Green Company)
25% x P1,200,000 P 300,000
Problem 5

PV at March 1, 2011 = (P400,000 x .74726) + (18,000 x 4.21236) = 298,904 + 75,822 = 374,726
May 1, 2011 purchase price:
Fair value at March 1, 2011 = P374,726
Discount amortization
March 1 to May 1
6% x 374,726 = P22,484
4.5% x 400,000 = 18,000
Amortization for 6 months P 4,484
No. of months-‐ Mar. 1 to May 1 2/6 1,495
Purchase price P376,221
Accrued interest 400,000 x 9% x 2/12 6,000
Total cash paid P382,221

May 1 FVPL -‐ XYZ Bonds 376,221
Interest Income 6,000
Cash 382,221

Sept 1 Cash 18,000

Dec 31 Interest Receivable 12,000
5

Dec. 31 FVPL – XYZ Bonds 51,779
Unrealized Gains on FVPL 51,779
Market value P428,000
Ledger balance 376,221
Unrealized gain P 51,779

2012
Mar. 1 Cash 18,000
Interest Receivable 12,000

May 1 Cash 125,400
Loss on Sale of FVPL ( 4% x 120,000) 4,800
FVPL – XYZ Bonds (107% x 120,000) 128,400
Selling price 120,000 x 103% P123,600
Accrued interest 120,000 x 9% x
2/12 1,800
Total cash received P125,400

July 1 Cash 4,500
FVPL – XYZ Ordinary Shares (2,200 x 80) 176,000
FVPL – XYZ Bonds (150,000 x 107%) 160,500
Gain on Exchange of FVPL 15,500
Interest Income (150,000 x 9% x 4,500
4/12)

Sept. 1 Cash (150,000 x 9% x 6/12) 6,750

Dec. 31 Interest Receivable (150,000 x 9% x 4/12) 4,500

31 Unrealized Loss on FVPL 3,000
FVPL – XYZ Bonds ( 2% x 150,000) 3,000

2013
Mar. 1 Cash 6,750

Sept. 1 Cash 6,750

1 Cash 150,000
Loss on Sale of FVPL 7,500
FVPL – XYZ Bonds (105% x 150,000) 157,500

6
Problem 6

Amortization Table

Date Nominal Effective Interest Amortization Carrying Value, end
Interest(4%) (5%)
6/1/11 P369,150
12/1/11 16,000 18,458 2,458 371,608
6/1/12 16,000 18,580 2,580 374,188
12/1/12 16,000 18,709 2,709 376,897
6/1/13 16,000 18,845 2,845 379,742
12/1/13 16,000 18,987 2,987 382,729
06/1/14 16,000 19,136 3,136 385,865

1. Interest Income, 2011
18,458 + (18,580 x 1/6) P21,555

(18,580 x 5/6) + 18,709 + (18,845 x 1/6) P37,333

(18,845 x 5/6) + 18,987 + (19,136 x 1/6) P37,880

4. Carrying Value, 12/31/12
CV, 12/1/12 P376,897
Amortization 12/1 to 12/31 (2845 x 1/6) 474
CV, 12/31/12 P377,371

Problem 7

Entries that should have been made:
Jan. 21 Investment in Pearl 204,000
Cash 206,550

Mar. 1 Cash 106,000
Investment in Pearl (204,000 x 100/200) 102,000
Interest Income (100,000 x 9% x 3/12) 2,250
Gain (Loss) on Sale of Trading Securities 1,750

June 1 Cash 4,500

Nov. 1 Cash 41,900
Gain (Loss) on Sale of Trading Securities 400
Investment in Pearl (204,000 x 40/200) 40,800
Interest Income (40,000 x 9% x 5/12) 1,500
7

Dec. 1 Cash 2,700
60,000 x 9% x 6/12

31 Interest Receivable 450
Interest Income 450
60,000 x 9% x 1/12

31 Investment in Pearl 600
Unrealized Gains on Trading Securities 600
(60,000 x 1.03) – (204,000 x 60/200)

Audit Adjustments
Investment in Pearl 2,550

Gain on Sale of TS 1,750


Loss on Sale of TS 400


Dividend Receivable 450
Interest Income 450

Investment in Pearl 600
Unrealized Gains on TS 600

SUPPLY THE REQUIRED INFORMATION

1. P12 per share
2. 2,500
3. 3,500 gain
4. 6,500
5. 350
6. 15,800
7. 55,200
8. 1,600
9. 376,400
8
10. 3,776,400
11. 0
12. 48,279
13. 2,167,000
14. 365,218
15. 360,000
16. 160,000
17. 35,000 loss
18. 1,970,000
19. 50,000 gain
20. 0
21. 30,000
22. 0
23. 0
24. 15,000
25. 116,000
26. 0
27. 1,816,000
28. 3,333
29. 1,000 gain
30. 18,300 gain
31. 200 gain
32. 10,600
33. 77,100
34. 55,000
35. 4,125
36. 111,000
37. 2,293,500
38. 316,500
39. 31,500
40. 4,125
41. 136,300
42. 0
43. 52,900
44. 7,500
45. 758,600
46. 3,133

Final Answers Computations
1. P36,000 or P12 per share
2. P2,500 gain Net selling price: (1,000 x 8) -‐ 500 = P7,500
Cost of shares sold P 30,000 x 1,000/6,000 5,000

3. P3,500 gain Selling price 1,000 x 8.50 P8,500
Cost of shares sold

9

4. P6,500 Property dividends 5,000/5 x P2.50 P2,500
Cash dividends 5,000 x 0.80 4,000
Total dividend income P6,500

5. P350 500 (3.20 – 2.50) P 350

6. P15,800
Unrealized Gain or Loss on AFS
01-‐01 Balance P6,000
03-‐17 1,000/6,000 x P6,000 (1,000)
11-‐30 1,000/6,000 x 6,000 (1,000)
12-‐31 Market value
6,000 x P 9.20 = P55,200
Cost 35,400
Cumulative Unrealized Gain 19,800
Balance before adjustment to FV
6,000 – 1,000 – 1,000 4,000
Unrealized gain this year in OCI 15,800
Cumulative balance in equity, Dec. 31 P19,800

7. P55,200 6,000 x 9.20 P55,200
8. P1,600 500 X 3.20 P 1,600

DEXTER COMPANY

AFS – Y Company Ordinary
Date Shares Total Cost Gain(loss) Dividend Income
01-‐01-‐12 3,000 P30,000
01-‐12-‐12 3,000
03-‐17-‐12 (1,000) (5,000) P2,500
06-‐30-‐12 1,000 x P2.50 = P2,500
10-‐01-‐12 2,000 15,400*
10-‐20-‐12 5,000 x 0.80= 4,000
11-‐30-‐12 (1,000) (5,000) 3,500
12-31-12
Balances 6,000 P35,400 P6,000 P6,500

• 2,000 (8.50 -‐ .80 dividends on) = 15,400

FVPL – B Co. Ordinary
Date Shares Total CV Gain(loss) Dividend Income
06-‐30-‐12 1,000 P2,500
9-‐10-‐12 (500) (1,250) 150
12-‐31-‐12 UGL
500 x (3.20 – 2.50) 350
12-‐31-‐12 balances 500 shares P1,600

Unrealized Gain or Loss on AFS
10
01-‐01-‐12 Balance P6,000

03-‐17 1,000/6,000 x P6,000 (1,000)
11-‐30 1,000/6,000 x 6,000 (1,000)
12-‐31 Market value
6,000 x P 9.20 = P55,200
Cost 35,400
Cumulative Unrealized Gain 19,800
Balance before adjustment to FV
6,000 – 1,000 – 1,000 4,000
Unrealized gain this year in OCI 15,800
Cumulative balance in equity, Dec. 31 P19,800

Items 9 through 14:

Kristine Company
10%Effective Discount Amortized Cost,
Interest Date 9%Interest Paid Interest Amortization End
Jan. 1, 2012 P3,760,000
June 30, 2012 P180,000 188,000 P8,000 3,768,000
Dec. 31, 2012 P180,000 188,400 8,400 3,776,400
June 30, 2013 P180,000 188,820 8,820 3,785,220
Dec. 31, 2013 P180,000 189,261 9,261 3,794,481
June 30, 2014 P180,000 189,724 9,724 3,804,205
Dec. 31, 2014 P180,000 190,210 10,210 3,814,415

Final Answers Computations
9. P376,400 P188,000 + 188,400 = P376,400
10. P3,776,400
11. P0
12. P48,279 Selling price on November 30 (1.8M x 98%) P1,764,000
Carrying amount
June 30, 2014 3,804,205 x 1.8/4 = P1,711,892
Amortization June 30 – Nov 30
10,210 x 1.8/4 x 5/6 = 3,829 1,715,721
Gain on sale on November 30 P 48,279

13. P2,167,000 P2,200,000 x 98.5% = P2,167,000

14. P365,218 Interest income for 2014
January 1 to June 30 P190,210
July 1 to November 30 190,210 x 5/6 = 158,508
December 1 to 31 P2,200,000 x 9% x 1/12 16,500
Total interest income P 365,218

Items 15 through 19

15. P360,000 P4,000,000 x 9% = P360,000

11
16. P160,000 (98% x P4,000,000) – 3,760,000 = P160,000

17. P35,000 loss

Total proceeds P1,960,000
Accrued interest 2,000,000 x 9% x 5/12 = ( 75,000)
Selling price P1,885,000
CV 96% x 2,000,000 1,920,000
Loss on sale of FVPL P 35,000

18. P1,970,000 2M x .985 = P1,970,000
19. P50,000
Fair value, 12/31/12 P1,970,000
Fair value, 12/31/11 2,000,000 x .96 1,920,000
Unrealized gain for 2012 P 50,000

Items 20 through 24

20. P0 There was no objective evidence of impairment. The decline is taken to OCI.

21. P30,000 Cumulative decline from date of acquisition = P10,000 + P20,000 = P30,000
(Impairment loss is taken to profit or loss)

22. P0 The recovery in fair value of AFS-‐ Equity is taken to other comprehensive income,
not to profit or loss.

23. P0 At the date impairment loss is recognized, the unrealized gain or loss in equity is
transferred to profit or loss. Hence, the equity account UGL is brought to zero.

24. P15,000 The recovery in fair value is taken to other comprehensive income through the
account Unrealized Gain or Loss on AFS.
Items 25 through 27
Power Cast Company

Cost of investment P1,800,000
Underlying equity 20% x P6,000,000 1,200,000
Excess of cost P 600,000
Undervaluation in land 20% x 750,000 (150,000)
Undervaluation in equipment 20% x 200,000 (40,000)
Undervaluation in inventory 20% x 30,000 ( 6,000)
Goodwill P 404,000_

25. P116,000 Income from Associate
Initial share (800,000 – 160,000) x 20% P128,000
Amortization
Depreciation on Equipment 40,000/5 x 9/12 ( 6,000)
Inventory ( 6,000)
Income from Associate P116,000

12
26. P0 Dividends received from associate should be credited to the Investment account.

27. P1,816,000 Cost of investment P1,800,000
Dividends received ( 100,000)
Income from Associate 116,000
Carrying value of investment P1,816,000

Items 28 through 33

Boracay Co. ordinary Bohol Company ordinary 8% treasury bonds
# of shares Amount # of shares Amount Face Amount
1/1/12 bal. 1,000 P 25,000 3,000 P18,000 P50,000 P50,000
1/31 (200) ( 5,000)
6/30 600
7/8 (300) (1,500)
8/1 (20,000) (20,000)
12/31 bal.
before Fair
Value adj. 800 P20,000 3,300 P16,500 30,000 P30,000
Adj to FV 4,000 6,600
12/31 per
audit 800 shares P24,000 3,300 P23,100 P30,000 P30,000

28. P3,333 Interest Income
January 1 to July 31 P50,000 x 8% x 7/12 = P2,333
August 1 to Dec. 31 P30,000 x 8% x 5?12 = 1,000
Total interest income for 2012 P3,333

29. P1,000 gain Net selling price P6,000
Carrying value P25,000 x 200/1,000 (5,000)

30. P18,300 gain Selling price P19,800
Carrying value P18,000 x 300/3,600 ( 1,500)
Gain on sale P18,300

31. P200 gain Cash received P21,000
Interest for 6 months (20,000 x 8% x 6/12) ( 800)
Carrying value 20,000
Gain on sale P 200

32. P10,600 See above worksheet: P4,000 + P6,600 P10,600

33. P77,100 See above worksheet: P24,000 PP23,100 + P30,000 = P77,100

13
Items 34 through 40

34. P55,000 P1,040,000 – P985,000 = P55,000

35. P4,125 From Alaska: 5,500 x P0.75 = P4,125

36. P111,000 P370,000 x 30% = P111,000

37. P2,293,500 Fair value of old 25,000 shares: P1,520,000 x 25,000/50.000 = P760,000
Purchase price of new 50,000 shares 1,520,000
Initial cost of 75,000 shares P2,280,000
Income from associate 111,000
Dividends received (75,000 x 1.30) ( 97,500)
Carrying value, December 31, 2013 P2.293,500

38. P316,500 Alaska 5,500 x 23 P126,500
Bahamas 10,000 x 19 190,000
Total fair value P316,500

39. P31,500 Fair value P316,500
Cost : 125,000 + 160,000 285,000
Cumulative balance of UGL P 31,500

40. P115,125 P111,000 + P4,125 = P115,125

Items 41 through 46

Financial Assets at Fair Value through Profit or Loss
Seattle Ordinary Grunge Preference Cobain Ordinary
Shares Amount Shares Amount Shares Amount
1/1/12 2,000 P28,400 1,200 P78,000
20% bonus 400
Sale (400) (4,733)
Purchase 1,500 P31,500
12/31 bal.
before adj to
FV 2,000 P23,667 1,200 P78,000 1,500 P31,500
Unrealized
Gains
(Losses) 4,333 (1,200)
Per audit 2,000 P28,000 1,200 P76,800 1,500 P31,500

41. P136,300 28,000 + 76,800 + 31,500 = 136,300

42. P0 Cash dividend from Grunge should have been recorded as income in 2011.

14
43. P52,900 Cost (800 x P50) + P5,400 = P45,400

Share in profit 50,000 x 20% x 9/12 7,500
Investment in Associate, Dec. 31 P52,900

44. P7,500 50,000 x 20% x 9/12 = P 7,500

45. 758,600 764,000 – 5,400 = P758,600

46. 3,133 See above worksheet : 4,333 – 1,200 P 3,133

A-MAGS CORPORATION

Selling and Administrative Expenses 2,000
Advances to Officers and Employees 1,500
Cash – Petty cash fund 3,500

Other Assets 130,000
Cash in Bank 130,000

Cash in Bank – PCI Bank – Current 5,000
Accounts Payable 5,000

Cash in Bank 45,000
Other Current Liabilities (Bank Overdraft) 45,000

Accounts Receivable – Past Due 20,000
Cash in Bank – PCI Bank 20,000

Accounts Receivable 15,000
Customer Credit Balances 15,000

Allowance for Doubtful Accounts 10,250
Accounts Receivable – Past due 10,250

Advances to Officers and Employees 3,500
Accounts Receivable 3,500

Sales 30,000
Discount on Notes Receivable 30,000

Notes Receivable – Non-Current 120,000
Notes Receivable 120,000
Discount on Notes Receivable – Non- current 24,337

15
Discount on Notes Receivable (30,000 x 5/12) 12,500

Discount on Notes Receivable – Non-current (95,663 x 12% x 10/12) 9,566

40,000 x 16% x 36/360 = 640
75,000 x 20% x 82/360 = 3,417
Total 4,057

Inventories 22,500
Accounts Payable 22,500

Sales 80,000
Advances from Customers 24,000
Accounts Receivable – Not yet due 56,000

Accounts Receivable – not yet due (182,000 x 60% x 125%) 136,500
Sales 136,500

Inventories ( 182,000 x 40%) 72,800
Cost of Sales 72,800

Accrued Expenses 182,000 x 60% x 5%) 5,460

Other Current Assets (80% x 28,000) 22,400
Loss due to Flood 5,600
Inventories 28,000

Equipment 15,000
Cost of sales 15,000

Accumulated Depreciation (15,000/5 x 6/12) 1,500
AR – Total AR – Not due
Per client P424,000 P187,000
Adjustments 20,000
15,000
(10,250)
(3,500)
(56,000) (56,000)
136,500 136,500
P525,750 P267,500

16
Operating Expenses 363

Allowance for Doubtful Accounts 363
Total Accounts Receivable P525,750
Accounts Receivable not yet due (267,500)
Accounts Receivable past due P258,250
Provision rate for past due accounts 5%
Required allowance P 12,913
Existing allowance ( 22,800 – 10,250) 12,550
Additional doubtful accounts expense P 363

Available for Sale Securities 47,800
Investments in Equity Securities 95,800

Allowance for Decline in Market Value 6,800
Market Adjustments – Available for Sale Securities 2,000

Unrealized Gains/Losses on Available for Sale Securities 2,000
Retained Earnings, January 1 2,000

Investments in Associate – Johnny Walker 280,000
Investment in Equity Securities 280,000

Investment in Associate – Johnny Walker 150,000
Income from Associate 150,000


Investment in Equity Securities 16,800


Treasury Stock 45,000

17
Trading Securities AFS Securities

Balances, January 1 adjustment P48,000 P 47,800
Adjustments ( 4,800)
(16,800)
2,400
Balances before adjustment P 28,800 P47,800
Market value, December 31
800 x 38 30,400
500 x 50 = P25,000
1,200 x 31= 37,200 62,200
Unrealized Gain P 1,600 P14,400
Balance before adjustment (Dr.) 2,000
Adjustment P 1,600 P16,400

Investment in Associate 30,000

Unrealized Gain on Trading Securities (I.S.) 1,600

Market Adjustment – AFS 16,400
Unrealized Gains/Losses on AFS 16,400

1. P491,500
2. P30,400
3. P525,750
4. P12,913
5. P6,500
6. P295,000
7. P12,500
8. P4,057
9. P5,000
10. P1,347,300
11. P5,500
12. P62,200
13. P400,000
14. P213,500
15. P257,629
16. P399,500
17. P275,000
18. P15,000
19. P24,000
20. P153,450
21. P122,960
22. P52,500
23. P490,914
24. P45,000
25. P14,400
26. P4,677,163
27. P3,682,361
18
28. P643,126
29. P9,000
30. P35,923
31. P2,400
32. P14,400
33. 16,400
34. P5,600
35. P150,000
36. 157,140
37. P366,659
38. 363
39. 9,566
40. 5612,724

19

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CHAPTER 6 – INVESTMENTS IN FINANCIAL INSTRUMENTS

Multiple Choice – Theories

Financial Assets at FV through P&L 400

*Unrealized Gain/Loss on Equity Investments -‐ OCI 30,000

01-‐01-‐12 Balance P6,000

16. P160,000 (98% x P4,000,000) – 3,760,000 = P160,000

Items 34 through 40

43. P52,900 Cost (800 x P50) + P5,400 = P45,400

Discount on Notes Receivable (30,000 x 5/12) 12,500

Operating Expenses 363

Trading Securities AFS Securities

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CHAPTER 6 – INVESTMENTS IN FINANCIAL INSTRUMENTS

Multiple Choice – Theories

Financial Assets at FV through P&L 400

*Unrealized Gain/Loss on Equity Investments -­‐ OCI 30,000

01-­‐01-­‐12 Balance P6,000

16. P160,000 (98% x P4,000,000) – 3,760,000 = P160,000

Items 34 through 40

43. P52,900 Cost (800 x P50) + P5,400 = P45,400

Discount on Notes Receivable (30,000 x 5/12) 12,500

Operating Expenses 363

Trading Securities AFS Securities

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*Unrealized Gain/Loss on Equity Investments -‐ OCI 30,000

01-‐01-‐12 Balance P6,000