Accounting for Cash surrender value 2. On January 1, 20x1, ABC Co. insured the life of one of its key management personnel for P5,000,000. ABC Co. is the beneficiary. The insurance policy requires annual payments of P50,000 at the start of each year. Information on cash surrender value is shown below: Cash surrender value Policy year Dec. 31, 20x1 Dec. 31, 20x2 90,000 110,000 Dec. 31, 20x3 Dec. 31, 20x4 130,000 Dec. 31, 20x5 Additional information: ABC Co. received P3,000 cash dividend from the life insurance on September 1, 20x4. The key employee died on July 1, 20x5. Requirements: Provide the journal entries on the following dates (Use the 'asset method' of recording disbursements.) a. January 1, 20x1 and December 31, 20x1 (adjusting entry) b. December 31, 20x3 (cash surrender value) c. September 1, 20x4 (dividends) d. December 31, 20x4 (cash surrender value) e. January 1, 20x5 (payment of insurance premium) f. July 1, 20x5 (assume the policy is also collected on this date) 3. On December 29, 20x1, ABC Co. acquires 1,000 units of an investment through a broker at P1.00 per unit, the quoted price on this date. Ownership over the financial asset transfers to ABC Co. on January 3, 20x2. The fair values per unit on December 31, 20x1 and January 3, 20x2 are P1.75 and P1.50, respectively Requirements: Provide the journal entries under the trade date accounting and the settlement date accounting assuming the financial asset purchased is classified as subsequently measured at: a. FVPL (held for trading securities), b. FVOCI (mandatory); and Amortized cost. C. 4. On December 29, 20x1, ABC Co. sells 1,000 units of an investment through a broker at P1.00 per unit, the quoted price on this date. The investment has a carrying amount of P1,200. Ownership over the financial asset transfers to the buyer on January 3, 20x2. The fair values per unit on December 31, 20x1 and January 3, 20x2 are P1.75 and P1.50, respectively. Requirements: Provide the journal entries under the trade date ccounting and the settlement date accounting assuming the financial asset sold was classified as subsequently measured at: a. FVPL (held for trading securities), b. FVOCI (mandatory); and c. Amortized cost.

Accounting for Cash surrender value 2. On January 1, 20x1, ABC Co. insured the life of one of its key management personnel for P5,000,000. ABC Co. is the beneficiary. The insurance policy requires annual payments of P50,000 at the start of each year. Information on cash surrender value is shown below: Cash surrender value Policy year Dec. 31, 20x1 Dec. 31, 20x2 90,000 110,000 Dec. 31, 20x3 Dec. 31, 20x4 130,000 Dec. 31, 20x5 Additional information: ABC Co. received P3,000 cash dividend from the life insurance on September 1, 20x4. The key employee died on July 1, 20x5. Requirements: Provide the journal entries on the following dates (Use the 'asset method' of recording disbursements.) a. January 1, 20x1 and December 31, 20x1 (adjusting entry) b. December 31, 20x3 (cash surrender value) c. September 1, 20x4 (dividends) d. December 31, 20x4 (cash surrender value) e. January 1, 20x5 (payment of insurance premium) f. July 1, 20x5 (assume the policy is also collected on this date) 3. On December 29, 20x1, ABC Co. acquires 1,000 units of an investment through a broker at P1.00 per unit, the quoted price on this date. Ownership over the financial asset transfers to ABC Co. on January 3, 20x2. The fair values per unit on December 31, 20x1 and January 3, 20x2 are P1.75 and P1.50, respectively Requirements: Provide the journal entries under the trade date accounting and the settlement date accounting assuming the financial asset purchased is classified as subsequently measured at: a. FVPL (held for trading securities), b. FVOCI (mandatory); and Amortized cost. C. 4. On December 29, 20x1, ABC Co. sells 1,000 units of an investment through a broker at P1.00 per unit, the quoted price on this date. The investment has a carrying amount of P1,200. Ownership over the financial asset transfers to the buyer on January 3, 20x2. The fair values per unit on December 31, 20x1 and January 3, 20x2 are P1.75 and P1.50, respectively. Requirements: Provide the journal entries under the trade date ccounting and the settlement date accounting assuming the financial asset sold was classified as subsequently measured at: a. FVPL (held for trading securities), b. FVOCI (mandatory); and c. Amortized cost.

Century 21 Accounting Multicolumn Journal

11th Edition

ISBN:9781337679503

Author:Gilbertson

Publisher:Gilbertson

Chapter19: Accounting For Plant Assets, Depreciation, And Intangible Assets

Section: Chapter Questions

Problem 6AP

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