Sales Accounts Receivable Purchases

Unadjusted balances 8,279,000.00 850,000.00 4,470,000.00

Adjustment 1 (209,000.00) (209,000.00)
Adjustment 2 (letter A) 37,000.00
Adjustment 3 (letter B)
Adjustment 4 (letter B)
Adjustment 5 (letter C) (195,000.00) (195,000.00)
Adjustment 6 (letter C)
Adjusted Balances 7,875,000.00 446,000.00 4,507,000.00

1. Sales for the year ended December 31, 2021 7,875,000.00

2. Purchases for the year ended December 31, 2021 4,507,000.00
3. Accounts receivable as of December 31, 2021 446,000.00
4. Inventory as of December 31, 2021 1,216,000.00
5. Accounts payable as of December 31, 2021 687,000.00

Adjusting Entries
Sales 209,000.00
1
Ar 209,000.00
Purchases 37,000.00
2
AP 37,000.00
Inventory 66,000.00
3
Cost of Sales 66,000.00
Inventory 200,000.00
4
Cost of Sales 200,000.00
Sales 195,000.00
5
AR 195,000.00
Inventory 150,000.00
6
Cost of sales 150,000.00
Accounts Payable Inventory
650,000.00 800,000.00

37,000.00
66,000.00
200,000.00

150,000.00
687,000.00 1,216,000.00
Bulacan Auto co
Date Shares Cost
Jan 2 Purchase 20,000.00 800,000.00

Malolos Company (OCI)

Date Shares Cost
Feb 1 Purchase 20,000.00 2,500,000.00
Brokerage fees 19,000.00
@ FV plus transaction cost 20,000.00 2,519,000.00
Oct 1 sale (3,000.00) (377,850.00)
Balance 17,000.00 2,141,150.00

RP Treasury 7% Bonds
Date Cost Fair Value
April 1 Purchase at cost 2,000,000.00 2,050,000.00
Aug 1 sale at cost (500,000.00) (512,500.00)
balance 1,500,000.00 1,537,500.00

1. Gain or loss on sale of P500,000 RP Treasury Bonds on August 1, 2021

Selling Price (500k x 1.03) 515,000.00
Carrying amount of bonds (500k x 1.025) 512,500.00
Gain on sale 2,500.00

2. Gain or loss on sale of 3,000 Malolos shares on October 1, 2021

Selling Price (3k x 132) 396,000.00
Carrying amount of shares (3k x 125.95) 377,850.00
Gain on sale 18,150.00

3. What amount of unrealized gain should be shown as component of income in 2021?

Bulacan Auto co 20,000 * (45-40) 100,000.00
RP Treasury 7% Bonds (1,500,000*1.02) - 1,537,500 (7,500.00)
Unrealize Gain 92,500.00

4. What amount of unrealized gain should be shown as component of equity as of December 31, 2021?
Malolos company (17,000*130)-2,141,150 68,850.00
cost/share
40.00

cost/share
125.00

125.95
125.95
125.95
France Corporation Preferred Shares
Date Shares
Beginning at fair value 5,000.00
Sept 21 Conversion to common stock (2,500.00)
TOTAL 2,500.00

France Corporation Common Stock

Date Shares
Beginning at fair value of preferred stock 15,000.00

Ces, Inc.
Date Shares
Beginning at fair value 30,000.00
March 1 sales (12,500.00)
July 1 Entitled for dividends 17,500.00
TOTAL 17,500.00

Coo Co, Inc.

Date Shares
Beginning at fair value 10,000.00
Jan 2 10% Stock Dividend 1,000.00
Balance after dividend 11,000.00
Sales (2,500.00)
TOTAL 8,500.00

1. How much is the gain on sale of 12,500 Ces shares?

Proceeds (12,500 x 33.75) 421,875.00
Carrying amount (12.5/30 x 742500) 309,375.00
Gain on sale 112,500.00

How much is the gain or loss on sale of 2,500 Coo shares?

Proceeds (2,500 x 45) 112,500.00
Carrying amount (2,500/11000 x 450000) 102,273.00
Gain on sale 10,227.00

3. How much is the gain or loss on conversion of 2,500 France preferred stock into 15,000 common stock?
Preferred Stock @FV (2500*78.75) 196,875.00
Carrying Amount of Preferred shares (487500 * (2.5/5)) 243,750.00
Loss on conversion (46,875.00)

4. How much is the total dividend income for the year 2021?
Ces, Inc. (17,500 *2.25) 39,375.00
 France corporation (5,000 * 2.50 * 2) 25,000.00
Total Dividend Income 64,375.00

5. How much should be reported as unrealized gain on trading securities in the company’s income statement for the year 20
Carrying Amount
France Corporation Preferred Stock 243,750.00
France Corporation Common Stock 196,875.00
Ces, Inc. 433,125.00
Coo Co, Inc. 347,727.00
Total Carrying amount of trading securities
Fair Val
France Corporation Preferred Stock (2500*92.25) 230,625.00
France Corporation Common Stock (7500*42.75) 320,625.00
Ces, Inc. Common Stock (17500 * 22.50) 393,750.00
Coo Co, Inc. Common Stock (8500*40.50) 344,250.00
Total Fair Value
Unrealized Gain
 Cost cost/share
487,500.00 97.50
(243,750.00) 97.50
243,750.00

Cost cost/share
196,875.00 13.13

Cost cost/share
742,500.00 24.75
(309,375.00) 24.75

433,125.00

Cost cost/share
450,000.00 45.00

450,000.00 40.91
(102,273.00) 40.91
347,727.00

5,000 common stock?

pany’s income statement for the year 2021?

1,221,477.00

1,289,250.00
67,773.00
NOTES
Balagtas Company
1. Preferred Stock dividends Conversion
The value of common stock is the fair value of the preferred stock