Group D4

Sherine Anne C. Vizconde All were responsible and cooperative in answering each and every question. Everyo
We did what is needed to be accomplished even in a short period of time.

Precious Anne Bernabe Our leader showed a good leadership skill and clarity.
We later on checked and compared each members answer for further corrections.

Justine Rein Sangalang Our coordinator did her best to lead our group. She allocate our task and work fairl
She is an effective communicator in giving informations to our team and she don’t

John Raezie Solis Our leader did a great job at leading our group. She provide responsible actions like
and feedbacks to our work. She also ensure that each one of us has equal tasks.
ach and every question. Everyone did their best to learn and participate in solving the activity
short period of time.

nswer for further corrections.

llocate our task and work fairly.

ns to our team and she don’t let anyone to be left behind.

rovide responsible actions like setting directions

h one of us has equal tasks.
Problem 15-2

On January 1, 2020, Spark Company purchased the following trading securities:

Fair value
Cost December 31,
2020
 Aura Company ordinary 600,000 650,000
Bora Company preference 350,000 200,000
Cara Company bonds 500,000 400,000

On October 1, 2021, the entity sold one-half of Aura Company ordinary for P375,000.

On December 31, 2021, the fair value of the remaining securities was P800,000.

Required: Prepare journal entries to record the transactions.

2021
January 1 Debit Credit
Trading securities ₱1,450,000.00
Cash ₱1,450,000.00
December 31
Unrealized Loss- TS 200 000
Trading Securities 200 000
2022
October 1,2022
Cash 375,000.00
Trading securities 325,000.00
Gain on sale of Trading securities 50,000.00
December 31,2022
Unrealized loss - Trading securities 125,000.00
Trading securities 125,000.00

Problem 15-5

1 Unrealized loss -OCI ₱100,000.00

Financial asset - FVOCI ₱100,000.00
2 Cash 2,100,000.00
Financial asset - FVOCI 2,000,000.00
 Retained earnings 100,000.00
3 Unrealized loss -OCI 250,000.00

Financial asset - FVOCI 250,000.00

600 000 + 350 000 + 500 000 = 1 450 000

650 000 / 2 = 325 000, 375 000 - 325 000 = 50 000

925 000 - 800 000 = 125 000

 Carrying Market
amount
XYZ 1200000 1000000
RST 200000 150000
1400000 1150000 1400000 - 1150000 = 250 000
Problem 16-1

Acclaim company purchased shares of another entity as permanent investment

January 2,2021 2,000 shares 100,000

December 20,2021 3,000 shares 198,000

Transactions for 2022

Jul-15 Received cash dividend of P5 per share.
Dec-15 Received 20% share dividend.
Dec-28 Sold 3,000 shares at P60 per share. Use FIFO approach.

Required: Prepare journal entries to record the transaction for 2022.

2022
15-Jul
Cash ₱25,000.00
Dividend income ₱25,000.00

15-Dec
Memo - Receive
1,000 shares
representing 20%
share dividend on
5000 shares held

28-Dec
Cash 180,000.00

Investment in shares 133,000.00

Gain on sale of
investment 47,000.00

Problem 16-4

Viable Company issued rights to subscribe to new share at P150 per share in the ratio
of one new share for five rights held. The share has market value of P190 and the
right has market value of P10.

An investor held 10,000 shares acquired at a total cost of P1,800,000. The share
rights are accounted for separately.

Required:

1 Prepare journal entry to record the acquisition of the original investment.

2 How many rights will the investor receive?
3 What is the initial measurement of the rights?
4 What is the journal entry to record rights?
5 What is the journal entry to record the acquisition of new investment through the exercise o
6 What is the journal entry to record the sale of the rights at P15 each?
7 What is the journal entry to record the expiration of rights?

1 Investment in shares ₱1,800,000.00

Cash ₱1,800,000.00
2 10000 rights
3 Initial measurement 10,000 (number of rights)
x 10 (market value of rights)

4 Share rights ₱100,000.00

Investment in shares ₱100,000.00
5 Investment in shares ₱400,000.00
Cash ₱300,000.00
Share rights 100,000.00
6 Cash ₱150,000.00
Share rights ₱100,000.00
Gain on sale of share rights 50,000.00
7 Loss on share rights ₱100,000.00
Share rights ₱100,000.00
5,000 shares x 5

3,000 x 60
100,000 + 33,000

180,000- 133,000

100,000.00
33,000.00
Cost of
Inventory ₱ 133,000.00
nt through the exercise of rights?

10,000 / 5 = 2,000, 2,000 * 150

Problem 17-1

Boorish Company acquired a 30% interest for P5,000,000 on January 1, 2021. This cost exceeds the
the investee with useful life of five years.

The investee reported the following information:

Net Income Dividends Paid
2021 4,000,000.00 3,000,000.00
2022 6,000,000.00 5,000,000.00

Required: Prepare journal entries on the books of Boorish Company from January 1, 2021 to D

2020 ₱5,000,000.00
Investment in Associate ₱5,000,000.00
Cash
Investment in Associate 1,200,000.00
Investment income 1,200,000.00
Cash 900,000.00

Investment in associate 900,000.00

Investment Income 200,000.00

Investment in associate 200,000.00

2021
Investment in
Associate 1,800,000.00
Investment income 1,800,000.00
Cash 1,500,000.00
Investment in associate 1,500,000.00
Investment income 200,000.00
Investment in associate 200,000.00
This cost exceeds the underlying net assets of
ears.

January 1, 2021 to December 31, 2022.

4,000,000 * 30%

1,000,000 / 5

6,000,000 * 30%