An entity buys and sells securities expecting to earn profits on short-term differences in price. During 2016, the entity purchased the following trading securities: Security A Fair Value Dec. 31, 2016 225,000 162,000 678,000 Cost B C 195,000 300,000 660,000 Before any adjustments related to these trading securities, the entity had net income of P900,000. What is the entity's net income after making any necessary trading security adjustments? a. 900,000 b. 810,000 c. 762,000 d. 948,000 What would the net income be if the fair value of security B were P285,000? a. 867,000 b. 900,000 c. 885,000 d. 933,000
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- On January 1, 2016, an entity purchased marketable equity securities not qualifying as financial asset held for trading. The entity elected to present changes in fair vake as component of other comprehensive income. On December 31, 2016, the securities have the following cost and market value: Cost Market Security A 1,000,000 1,100,000 Security B 2,000,000 2,700,000 Security C 3,000,000 2,800,000 6,000,000 6,600,000 1. What is the entry to record the unrealized gain or loss? 100,000300,000Financial asset-FVOCI(200,000)Financial asset-OCIUnrealized gain-OCI700,000600,000Retained earnings1,400,000Cash1,100,000 100,000300,000Financial asset-FVOCI(200,000)Financial asset-OCIUnrealized gain-OCI700,000600,000Retained earnings1,400,000Cash1,100,000 100,000300,000Financial asset-FVOCI(200,000)Financial asset-OCIUnrealized gain-OCI700,000600,000Retained earnings1,400,000Cash1,100,000…Can you help me to calculate adjusted net income, adjusted net income if FV of security B were 285,000, value of held for trading securities as of 12/31/2020 and assuming these securities at measured at FVOCI, calculate the value of these financial assets as of 12/31/2020 Problem: ABC Corporation buys and sells securities expecting to earn profits on short term differences in price. during 2020, ABC Corporation purchased the following held for trading securities. Security A: Cost- 195,000; FV at 12/31/2020- 225,000 Security B: Cost- 300,000; FV at 12/31/2020- 162,000 Security C: Cost- 678,000; FV at 12/31/2020- 660,000 Before any adjustments related to these securities, ABC Corporation had net income of 900,000During 2021, Lavida Loca Company purchased trading securities with the following cost and market value on December 31, 2021. Cost Market value A 300,000 400,000 B 1,500,000 1,700,000 C 3,800,000 3,900,000 The entity sold Investment C on January 10, 2022 for P 4,000,000 What is the unrealized gain or loss should be reported in the income statement for 2021? a. 100,000 gain b, 100,000 loss c. 400,000 gain d. 400,000 loss
- The Carrefour Group reported the following description of its available-for-sale investments. Assets available for sale are . . . valued at fair value. Unrealized . . . gains or losses are recorded as shareholders’ equity until they are sold. In a recent year, Carrefour’s financial statements reported €18 million in net unrealized losses (net of unrealized gains), which are included in the fair value of its available-for-sale securities reported on the balance sheet. 1. What amount of the €18 million net unrealized losses, if any, is reported in the income statement? Explain. 2. If the €18 million net unrealized losses are not reported in the income statement, in which statement are they reported, if any? Explain.During 2017, Latvia Company purchased trading securities with the following cost and market value on December 31, 2017. Security Cost Market Value A – 1 000 shares 200 000 300 000 B – 10 000 shares 1 700 000 1 600 000 C – 20 000 shares 3 100 000 2 900 000 5 000 000 4 800 000 The entity sold 10 000 shares of security B on January 15, 2018, for P 150 per share. 1. What amount of unrealized gain or loss should be reported in income statement for 2017? 2. What amount should be reported as loss on sale of trading investment of 2018?- Assuming no other transactions are noted regarding these financial assets at fair value through profit or loss, what is the amount of unrealized gain/loss reported in the 2021 income statement relating to these securities? A. P29,000 loss B. P20,000 loss C. P29,000 gain D. P20,000 gain - What is the gain on sale reported in A Company's 2022 income statement? A. P38,000 B. P18,000 C. P9,000 D. P0 - Assuming that the securities held by A Company are classified as at fair value through other comprehensive income, what is the gain on sale reported in A Company's 2021 income statement? A. P38,000 B. P18,000 C. P9,000 D. P0
- A company purchases debt securities for $100,000 at the beginning of 2022. It classifies as trading securities and $60,000 as AFS securities. It sells the securities in 2023. Required For each of the following scenarios, indicate the net effect on income and other comprehensive income in each year 2022 and 2023. In each case, any unrealized decline in value below cost is expected to be recovered and is attributed to market factors. a. Fair value, end of 2022 Selling price, 2023 Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI. OCI End of 2022 $ 2023 b. Trading securities AFS securities $38,000 $65,000 43,000 64,000 Income Fair value, end of 2022 Selling price, 2023 End of 2022 $ 2023 (2,000)✓ $ 9,000 ✓ Trading securities AFS securities $45,000 $56,000 42,000 68,000 Note: Use a negative sign with an answer to indicate the net effect amount decreases Income or OCI. OCI (4,000) ✔ 0 x 5,000 ✓ 0 x Income 5,000 $ 5,000 ✓During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 lossStrawberry Corp. has various equity investment at fair value through profit or loss transactions during 2020 and 2021. The acquisition cost of all the securities in its portfolio during 2020 was P 532,000. At December 31, 2020 and December 31, 2021, the market values of these investments were P 541,000 and P 512,000, respectively. In 2022, all of these securities were sold for P 550,000. Assuming no other transactions are noted regarding these financial assets at fair value through profit or loss, what is the amount of unrealized gain/loss reported in the 2021 income statement relating to these securities? A. P 29,000 loss B. P 20,000 loss C. P 29,000 gain D. P 20,000 gain
- On January 1, 2021, an entity purchased marketable equity securities for P5,000,000. The equity securities qualify as a financial asset held for trading. The entity also paid P50,000 as commission to the broker. At year-end, the trading securities have a fair value of P6,000,000. The increase in fair value should be recorded with: a.A credit to Financial asset - FVPL, P1,000,000 b.A debit to Unrealized gain - OCI, P1,000,000 c.A debit to Financial asset - FVPL, P1,000,000 d.A debit to Unrealized gain - P/L, P1,000,000Some of Cullumber Lake Limited's investment securities are classified as trading securities and some are classified as non- trading. The cost and fair value of each category at December 31, 2020, were as follows. Trading securities Nokn-trading securities Cost ¥96,500 ¥59,500 Fair Value ¥85,000 $64,000 Unrealized Gain (Loss) ¥(11,500 ) ¥4,500 At December 31, 2019, the Fair Value Adjustment-Trading account had a debit balance of ¥2,600, and the Fair Value Adjustment-Non-Trading account had a credit balance of ¥6,200. Prepare the required journal entries for each group of securities for December 31, 2020.Problem 4: On January 1, 2017, an entity purchases marketable equity securities for P2,000,000. The securities do not qualify as financial asset held for trading. The entity elected to present changes in fair value in other comprehensive income. On December 21, 2017, the securities have market value of P1,800,000. The changes in market value shall be recorded as?