AUDIT OF INVESTMENTS

QUESTIONS: Based on the above and the result of your audit, answer the following:

1. How much is the adjusted balance of CHICKER’s “trading securities” as of December

31, 2005?
a. P935,200 b. P1,155,200 c. P1,158,000 d. P1,229,000

2. How much is the average cost per share of PLDT’s stocks as of December 31, 2005?
a. P23.43 b. P25.63 c. P29.50 d. P30.75

3. How much is the average cost per share of Benpres stocks as of December 31,
2005?
a. P20.00 b. P22.50 c. P23.00 d. P25.00
4. How much is the total gain (loss) on sale of trading securities for the year 2005?
a. P291,000 b. P3,000 c. (P82,800) d. (P9,000)
1. The gain on sale of 10,000 shares of Loyal Company on March 30 is
a. P500,000 b. P1,500,000 c. P550,000 d. None

2. The gain on sale of 10,000 shares of Loyal Company on July 29 is

a. P625,000 b. P337,500 c. P525,000 d. P150,000

3. The correct acquisition cost of 20,000 shares of Faithful Corp. acquired on September 5 is
a. P3,500,000 b. P950,000 c. P1,000,000 d. P3,450,000
4. The gain on sale of 20,000 shares of Faithful Corp. October 5 is
a. P350,000 b. P300,000 c. P1,028,500 d. P314,300

5. The gain on sale of 20,000 shares of Faithful Corp. on November 10 is

a. P1,000,000 b. P2,400,000 c. P2,300,000 d. P2,200,000

6. The balance of the Company’s investment in Loyal Company before mark-to-market

on December 31, 2005 is
a. P475,000 b. P500,000 c. P1,475,000 d. P525,000

7. The adjusted balance of the Company’s investment in Faithful Corp. before mark-tomarket on
December 31, 2005 is
a. P1,500,000 b. P1,350,000 c. P1,200,000 d. P1,000,000

8. The income from investment in common stock of Trustworthy Company to be reported on the income
statement for the year ended December 31, 2005 is
a. P156,000 b. P159,000 c. P120,000 d. P39,000

9. The adjusted balance of investment in Trustworthy Company at December 31, 2003 is

a. P1,326,000 b. P1,170,000 c. P1,287,000 d. P1,251,000