Problem 15-8
*Cost VS Current Market Value = CUMULATIVE ADJUSTMENT
TOTAL COST 1,850,000.00
CURRENT MARKET VALUE - 12/31/2020 2,000,000.00
CUMULATIVE UNREALIZED GAIN 150,000.00 (2019 AND 2020)
2019 - Unrealized Loss - 200,000.00 *Loss - negative / Gain - Positive
2020 - Unrealized 350,000.00 LETTER A
Cumulative Unrealized Gain 150,000.00
Problem 15-9
TOTAL COST 3,000,000.00
CURRENT MARKET VALUE - 12/31/2020 1,200,000.00
CUMULATIVE UNREALIZED LOSS - 1,800,000.00 (2019 AND 2020)
2019 - Unrealized Loss - 400,000.00 *Loss - negative / Gain - Positive
2020 - Unrealized - 1,400,000.00 If the question is only about unrealized gain or loss in 2020, then th
Cumulative Unrealized Loss - 1,800,000.00 LETTER B
Problem 15-10
TOTAL COST 5,000,000.00
CURRENT MARKET VALUE - 12/31/2020 4,500,000.00
CUMULATIVE UNREALIZED LOSS - 500,000.00 (2019 AND 2020)
2019 - Unrealized Loss - 200,000.00 *Loss - negative / Gain - Positive
2020 - Unrealized - 300,000.00 If the question is only about unrealized gain or loss in 2020, then th
Cumulative Unrealized Loss - 500,000.00 LETTER A
Problem 15-11
Trading Investments - ONLY P/L
Non-Trading Investment - Choice P/L or OCI; when the problem is silent - OCI because we assume that the investment is long
Trading Investment
Cost 360,000.00
Market Value 320,000.00
Unrealized Loss - 40,000.00 Income Statement
LETTER C
Non-Trading Investment
Cost 550,000.00
Market Value 450,000.00
Unrealized Loss - OCI - 100,000.00 Balance Sheet - Equity Section
Problem 15-12
Portfolio - collection of investments
The reason why there is existence of both unrealized gain and losses is because the company has portfolio of investments.
Portfolio Presentation of Changes in Fair Value
Unrealized Gains - OCI (Cumulative) 40,000.00
Unrealized Loss - OCI (Cumulative) - 260,000.00
Net Unrealized Loss - OCI - 220,000.00 LETTER B
Problem 15-13
December 31, 2019
Cost of Security B 1,700,000.00
Market Value of Security B 1,550,000.00
Unrealized Loss - OCI - 150,000.00 Directly be charged to retained earnings upon derecognition of secu
Selling Price of Security B 1,450,000.00
Carrying Amount 1,550,000.00
Loss on Sale - 100,000.00 eventually be closed in the retained earnings.
LETTER C
Problem 15-14
P/L - Transaction costs are expensed immediately.
OCI - Transaction costs are capitalized (form part of the asset).
Portfolio of Investments Initial Value Market Value Changes
Security A 1,100,000.00 1,500,000.00 400,000.00
Security B 2,200,000.00 2,400,000.00 200,000.00
Security C 4,400,000.00 4,700,000.00 300,000.00
7,700,000.00 8,600,000.00 900,000.00
July 1, 2020
Selling Price - Security C 5,200,000.00
Carrying Amount - Security C 4,700,000.00
Gain on Sale 500,000.00 LETTER B
The total amount to be presented in the RETAINED EARNINGS
Derecognized Unrealized Gain - OCI 300,000.00
Gain on Sale 500,000.00
800,000.00
Problem 15-15
For 2019: Cost Market Value Changes
Security A 900,000.00 1,000,000.00 100,000.00
Security B 1,000,000.00 1,600,000.00 600,000.00
700,000.00
For 2020:
Selling Price of Security B 1,100,000.00
Carrying Amount of Security B 1,600,000.00
Loss on Sale - 500,000.00
12/31/2019 12/31/2020 Changes
Security A 1,000,000.00 600,000.00 - 400,000.00
Total Loss to be recognized in Income Statement
From Sale of Security B - 500,000.00
From Changes in FV of Security A - 400,000.00
- 900,000.00 LETTER C
12/31/2019 - Market Value 1,650,000.00
12/31/2020 - Market Value 2,000,000.00
Unrealized Gain - 2020 350,000.00
12/31/2019 - Market Value 2,600,000.00
12/31/2020 - Market Value 1,200,000.00
Unrealized Loss - 2020 - 1,400,000.00
out unrealized gain or loss in 2020, then this is the answer.
12/31/2019 - Market Value 4,800,000.00
12/31/2020 - Market Value 4,500,000.00
Unrealized Loss - 2020 - 300,000.00
out unrealized gain or loss in 2020, then this is the answer.
use we assume that the investment is long term.
e company has portfolio of investments.
tained earnings upon derecognition of security B
he retained earnings.
Unrealized Gain - OCI
Unrealized Gain - OCI
Unrealized Gain - OCI
Unrealized Gain - Income Statement
Unrealized Gain - Income Statement
Unrealized Loss - Income Statement
