PAMANTASAN NG LUNGSOD NG VALENZUELA

Intermediate Accounting I
Assignment: Financial Asset at Fair Value

NAME: SCORE: SECTION:

PROBLEM:

Problem 01. ABCDEFGHIJKLMNOP Company invested its excess cash in equity securities during 2016. The
company make an irrevocable election to present in other comprehensive income the subsequent changes in fair
value for these investments.

Case 1 Case 2 Case 3 Case 4 Case 5 Case 6

Cost at Purchase
P 90,000 P 90,000 P 90,000 P 90,000 P 90,000 P 90,000
Date (01/01/2016)
Fair Value at
75,000 75,000 75,000 100,000 100,000 100,000
December 31, 2016
Fair Value at
70,000 80,000 95,000 105,000 93,000 86,000
December 31, 2017

Requirement:
For every case, prepare the necessary journal entry on December 31, 2016 and December 31, 2017.

Problem 02. QRSTUVWXYZ Corporation invested its excess cash in equity securities during 2016. The
company make an irrevocable election to present in other comprehensive income the subsequent changes in fair
value for these investments.

Cost Market Value

Investment
01/01/2016 12/31/2016
AAA Ordinary Shares, 10,000 shares P 1,000,000 P 900,000
BBB Ordinary Shares, 20,000 shares 1,500,000 1,850,000
CCC Preference Shares, 30,000 shares 1,200,000 1,050,000

During 2017, QRSTUVWXYZ Corporation sold half of its investment in AAA Company for P500,000. It also
sold one-third of its investment in CCC Company for P275,000 and one-fourth of its investment in BBB
Company for P400,000.

At the end of the 2017, the quoted prices of the investments are as follows:
AAA Ordinary shares P 105
BBB Ordinary shares 88
CCC Preference shares 36

Requirement: Prepare all the necessary journal entries for 2016 and 2017 transactions.

FAR3: Assignment – Financial Assets at Fair Value (2018-2019, 2nd Semester) jvacpa Page 1 of 1