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Trucking Co.’s shares have a fair value of P 81 per share on December 31, 20x1.
Requirements: Provide the journal entries. Determine the total net gail (loss) from
the sale and fair value change during the period.
Solution:
Acquisitio Held for trading securities 390,000
n
Taxes and licenses 18,500
Cash 408,500
Sale Cash [(3,000 x 82) – 12,300] 233,700
Loss 6,300
Held for trading sec. (3,000 x 80) 240,000
Dec. 31, Held for trading securities 22,000
20x1
Gain (a) 22,000
(a)
Fair value on 12/31/x1 (10,000 sh. + 5,000 sh. – 3,000 sh.) x ₱81 972,000
Carrying amount (10,000 sh. x ₱80) beg. + 390,000 Dr. – 240,000 Cr. 950,000
Gain 22,00
❖ Reconciliation:
Held for trading - beg. 800,00
0
Acquisitions during the year 390,00
0
Total 1,190,00
0
Held for trading - end. 972,00
0
Net proceeds from sale 233,70
0
Total 1,205,70
0
Total net gain from fair value change and sale 15,7
00
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