PROBLEMS

On January 1, 2009 Libya Company purchased equity securities to be held as FVOCI. On

December 31, 2009, the cost and market value were:
COST MARKET
Security X 2,000,000 2,400,000
Security Y 3,000,000 3,500,000
Security Z 5,000,000 4,900,000
On July 1, 2010, Libya Company sold Security X for P2,500,000.
1. What amount of net unrealized gain on FVOCI securities should be reported in the 2009
other comprehensive income?
2. What is carrying amount FVOCI securities should be reported in the 2009 financial
statement?
3. What amount of gain on sale of FVOCI securities should be reported in the 2010 other
comprehensive income?

On January 1, 2009, Free Company purchased marketable equity securities to be held as

"trading" for P4,000,000. The company also paid commission to the stockbroker in the amount
of P100,000. No securities were sold during 2009. The market value of the equity securities on
December 31, 2009 is P4,500,000.
4. What amount of unrealized gain on these securities should be reported in the 2009 income
statement?
5. On initial recognition, the carrying amount of investment is:

On January 1, 2021, Gina Co. acquired 10%, P4,000,000 bonds as investment at amortized
cost for P 3,607,853 and paid P200,000 commission. The principal is due on January 1, 2024
but interest is due annually every December 31. The yield rate on the bonds is 12%. On
December 31,2021 the fair value of bonds is P3,900,000. On December 31, 2022 the
investment was sold for 102.
6. How much is the carrying amount of investment on initial recognition?
7. How much is the interest income recognized in 2021?
8. How much is the carrying amount of the investment on December 31, 2021?
9. How much is the change in fair value of the investment recognized on December 31,2021?
10. How much is the gain or loss on sale of investment/