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[solution]: Problem 1: At the beginning of current year , Laudable Company


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Problem 1: At the beginning of current year , Laudable Company acquired 200,000 ordinary shares of an investee for P9,000,000. The investment is measured at fair value through other comprehensive income. At the time of purchase, the investee had outstanding 800,000 shares with a carrying amount of P36,000,000. The following events took place during the year:

* The investee reported net income of P1,800,000.

* Laudable Company received from the investee a dividend of 0.75 per ordinary share.

* The market value of the investee's share had declined to P40 at year-end.

What is the carrying amount of the investment at year end?

a. 9,000,000

b. 8,000,000

c.9,300,000

d.9,450,000

Problem 2: At the beginning of current year , Manifold Company began operations. The following information related to the portfolio of equity securities held for trading at year-end:

                                                                                                     Trading                           Nontrading

Aggregate cost                                                                         360,000                              550,000

Aggregate fair value                                                                320,000                              450,000

Aggregate lower of cost of market        

value applied to each security

in the portfolio                                                                         304,000                              420,000

The nontrading investments are measured at fair value through other comprehensive income. The fair value declines are judged to be nontemporary.

What amount should be reported as unrealized loss in the income statement for the current year?

a. 140,000

b. 186,000

c. 40,000

d. 56,000

Problem 3: Lagoon Company purchased the following securities during 2016:

                                    Classification                Cost                      Market value December 31,2016

Security A                     Trading                          900,000                                1,000,000

Security B                     Trading                         1,000,000                              1,600,000

On July 31,2017, the entity sold all the shares of Security B for 100,000. On December 31,2017, the shares of Security A had a market value of P600,000

No other activity occured during 2017 in relationto the trading security portfolio.

What total loss on trading securities should be reported in the income statement for 2017?

a. 500,000

b. 400,000

c.900,000

d. 100,000


I need answers with solution please, thank you!

 


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