Department of Accounting Education

Mabini Street, Tagum City

Davao del Norte
Telefax: (084) 655-9591, Local 116

Big Picture in Focus: ULOb. Apply substantive test of

investments.

Metalanguage
Please proceed immediately to the “Essential Knowledge”.

Essential Knowledge
To perform the aforesaid big picture (unit learning outcomes), you need to fully
understand the following essential knowledge that will be laid down in the succeeding
pages. Please note that you are not limited to exclusively refer to these resources.
Thus, you are expected to utilize other books, research articles and other resources
that are available in the university’s library e.g. ebrary, search.proquest.com etc.

1. SUBSTANTIVE AUDIT OF INVESTMENTS IN DEBT/EQUITY FINANCIAL

INSTRUMENTS
1.1 Audit Objectives and Procedures.
Assertions Audit Objectives Audit Procedures
I. Existence or A. To determine that 1. Obtain or prepare a listing
Occurrence investments in of securities and
securities (shares, investments owned by the
bonds, notes) company and related
physically exist and revenue accounts and
in loans and reconcile to the general
advances exist. ledger.
2. Inspect securities on hand.
3. Obtain confirmation of
securities held by others.
II. Completeness B. To determine that 4. In addition to audit
investments are all procedure 2 and 3, vouch
included in the selected purchases and
balance sheet. sales transactions of
securities during the year.
III. Rights and C. To determine that 5. In addition to audit
Obligations the company owns procedures 2 and 3, verify
or has ownership the clients’ cutoff of
rights to all securities transactions.
investments 6. Perform analytical
included in the procedures.
balance sheet. 7. Compute independently
revenue from securities.
IV. Valuation D. To determine that 8. Determine market value of
investments are securities at balance sheet
valued properly in date.
accordance with 9. Evaluate the method of
generally accepted accounting for securities.
accounting
principles.

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

V. Presentation E. Investments are 10. Evaluate financial

and Disclosure properly described
and classified in the
balance sheet and
related disclosures
are adequate.
statement presentation
and related revenue or
loss accounts.

AUDIT WORKING PAPER – Securities Count Sheet

ILLUSTRATIVE PROBLEM 1
On December 31, 2019, BLACK Company’s balance sheet showed the following
balances related to its securities accounts:

Trading securities P1,477,500

Available-for-sale securities (AFS) 1,180,000
Interest receivable-Mayniladlad water bonds 12,500
Unrealized gain – AFS 100,000

La Cost’s securities portfolio on December 31, 2019, was made up of the following
securities:

Security Classification Cost Market

10,000 shares Yeye Bonel Corp. stock Trading P750,000 P762,500
8,000 shares Totoy Bibo Inc. stock Trading 550,000 528,250
10% Mayniladlad water bonds (interest
payable semiannually on Jan. 1 and Trading 250,000 186,750
Jul. 1)
10,000 shares Bulaklak Inc. stock Available for 590,000 630,000
sale
20,000 shares Jumbo Hotdog Unlimited Available for 490,000 550,000
Inc. stock sale

During 2020, the following transactions took place:

Jan. 3 Receive interest on the Mayniladlad water bonds.

Mar. 1 Purchased 3,000 additional shares of Yeye Bonel Corp. stock for
P229,500, classified as a trading security.

Apr. 15 Sold 4,000 shares of the Totoy Bibo Inc. stock for P69 per share.

May 4 Sold 4,000 shares of the Bulaklak Inc. stock for P62 per share.

July 1 Received interest on the Mayniladlad water bonds.

Oct. 30 Purchased 15,000 shares of Pasaway Co. stock for P832,500, classified
as a trading security.

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

The market values of the stocks and bonds on December 31, 2020, are as follows:
Yeye Bonel Corp. stock P76.60 per share
Totoy Bibo Inc. stock P68.50 per share
Pasaway Co. stock P55.25 per share
Mayniladlad water bonds P205,550
Bulaklak Inc. stock P61.00 per share
Jumbo Hotdog Unlimited Inc. stock P27.00 per share

QUESTIONS:
Based on the above and the result of your audit, determine the following:
1. Gain or loss on sale of 4,000 Totoy Bibo Inc. shares on April 15, 2020
a. P1,000 gain b. P1,000 loss c. P11,875 gain d. P11,875 loss
2. Net realized gain or loss on sale of 4,000 Bulaklak Inc. shares on May 4, 2020
a. P12,000 gain b. P12,000 loss c. P4,000 gain d. P4,000 loss
3. Carrying value of Trading Securities as of December 31, 2020
a. P2,337,000 b. P2,287,800 c. P2,304,100 d. P2,297,400
4. Carrying value of Available for Sale Securities as of December 31, 2020
a. P844,000 b. P806,000 c. P906,000 d. P944,000
5. In 2020, what amount of unrealized gain or loss should be shown as component
of income and stockholders’ equity?
Income Stockholders’ equity
a. P28,725 gain P62,000 gain
b. P28,725 gain P22,000 loss
c. P32,900 loss P122,000 loss
d. P39,600 gain P78,000 gain

SUGGESTED SOLUTIONS:

Question no. 1
Selling price (4,000 shares x P69) 276,000
Less CV of shares sold (P528,250 x 4/8) 264,125
Gain on sale of Totoy Bibo shares 11,875 C

Question no. 2
Selling price (4,000 shares x P62) 248,000
Less CV of shares sold (P630,000 x 4/10) 252,000
Loss on sale of Bulaklak shares (4,000) D

Question no. 3
Yeye Bonel [(10,000+ 3,000) x P76.60] 995,800
Totoy Bibo [(8,000 - 4,000) x P68.50] 274,000
Pasaway (15,000 x P55.25) 828,750
Mayniladlad 205,550
Total market value 2,304,100 C

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

Question no. 4
Bulaklak Inc. [(10,000 - 4,000) x P61] 366,000
Jumbo Hotdog (20,000 x P27) 540,000
Total market value 906,000 C

Question no. 5 – A
Trading securites, 12/31/19 1,477,500
Cost of 3,000 additional Yeye Bonel shares, 3/1 229,500
CV of 4,000 Totoy Bibo shares sold, 4/15 (264,125)
Cost of 15,000 Pasaway shares purchased, 10/30 832,500
Trading securites, 12/31/20 before mark-to-market 2,275,375
Trading securites at market 2,304,100
Unrealized gain on TS to be reported on the IS 28,725

AFS, 12/31/19 1,180,000

CV of 4,000 Bulaklak shares sold, 5/4 (252,000)
AFS, 12/31/20 before mark-to-market 928,000
AFS at market 906,000
Decrease in unrealized gain 22,000
Unrealized gain-AFS, 12/31/19 (P100,000 - P16,000) 84,000
Unrealized gain-AFS, 12/31/20 to be reported under SHE 62,000

ILLUSTRATIVE PROBLEM 2

On June 1, 2020, BLUE Corporation purchased as a long term investment 4,000 of

the P1,000 face value, 8% bonds of WHITE Corporation. The bonds were purchased
to yield 10% interest. Interest is payable semi-annually on December 1 and June 1.
The bonds mature on June 1, 2026. Pandi uses the effective interest method of
amortization. On November 1, 2020, Pandi sold the bonds for a total consideration of
P3,925,000. Pandi intended to hold these bonds until they matured, so year-to-year
market fluctuations were ignored in accounting for bonds.

QUESTIONS:
Based on the above and the result of your audit, determine the following: (Round off
present value factors to four decimal places)
1. The purchase price of the bonds on June 1, 2020 is
a. P3,645,328 c. P3,696,736
b. P3,691,132 d. P3,624,596

2. The interest income for the year 2020 is

a. P215,850 c. P212,829
b. P215,521 d. P211,612

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

3. The carrying value of the investment in bonds as of December 31, 2020 is

a. P3,725,919 c. P3,719,986
b. P3,649,541 d. P3,671,490

4. The interest income for the year 2020 is

a. P306,607 c. P311,218
b. P310,715 d. P304,748

5. The gain on sale of investment in bonds on November 1, 2020 is

a. P21,196 c. P 27,632
b. P80,235 d. P104,045

Suggested Solution:
Question No. 1
PV of principal (P4,000,000 x 0.5568) P2,227,200
PV of interest [(P4,000,000 x 4%) x 8.8633] 1,418,128
Purchase price P3,645,328
Question No. 2
June 1 to Nov. 30 (P3,645,328 x 10% x 6/12) P182,266
Dec. 1 to Dec. 31 (P3,667,594a x 10% x 1/12) 30,563
Total interest income for 2020 P212,829
a Computation of carrying value,12/1/20:
Carrying value, 6/1/20 P3,645,328
Add discount amortization,
6/1/20 to 11/30/20:
Effective interest (P3,645,468 x 10% x 6/12) P182,266
Nominal interest (P4,000,000 x 8% x 6/12) 160,000 22,266
Carrying value, 12/1/20 P3,667,594

Question No. 3
Carrying value, 12/1/20 (see no. 2) P3,667,594
Add discount amortization,
12/1/20 to 12/31/20:
Effective interest (P3,667,594 x 10% x 1/12) P30,563
Nominal interest (P4,000,000 x 8% x 1/12) 26,667 3,896
Carrying value, 12/31/20 P3,671,490

Question No. 4
Jan. 1 to May 31 (P3,667,594 x 10% x 5/12) P152,816
June 1 to Nov. 1 (P3,690,974b x 10% x 5/12) 153,791
Total interest income for 2021 P306,620

b Computationof carrying value,6/1/21:

Carrying value, 12/1/20 P3,667,594

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Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

Add discount amortization,

12/1/20 to 5/31/21
Effective interest (P3,667,594 x 10% x 6/12) P183,380
Nominal interest (P4,000,000 x 8% x 6/12) 160,000 23,380
Carrying value, 6/1/21 P3,690,974

Question No. 5
Total proceeds P3,925,000
Less accrued interest (P4,000,000 x 8% x 5/12) 133,333
Sales proceeds 3,791,667
Less carrying value, 11/1/21 (see below) 3,711,432
Gain on sale on investment in bonds P 80,235

Computation of carrying value,11/1/21:

Carrying value, 6/1/21 (see no. 4) P3,690,974
Add discount amortization,
6/1/21 to 11/1/21
Effective interest (P3,690,974 x 10% P153,791
x 5/12)
Nominal interest (P4,000,000 x 8% x 133,333 20,468
5/12)
Carrying value, 11/1/21 P3,711,432

Answers: 1) A; 2) C; 3) D; 4) A, 5) B

ILLUSTRATIVE PROBLEM 3

On January 1, 2019, an entity acquired a 10% interest in an investee for P3,000,000.

The investment was accounted for under the cost method. During 2019, the investee
reported net income of P4,000,000 and paid dividend of P1,000,000. On January 1,
2020, the entity acquired a further 15% interest in the investee for P8,500,000. On
such date, the carrying amount of the net assets of the investee was P36,000,000 and
the fair value of the 10% existing interest was P3,500,000. The fair value of the net
assets of the investee is equal to carrying amount except for an equipment whose fair
value was P4,000,000 greater than carrying amount. The equipment had a remaining
life of 5 years. The investee reported net income of P8,000,000 for 2020 and paid
dividend of P5,000,000 on December 31, 2020.

1. What amount of investment income should be recognized in 2019?

a. 400,000 b. 100,000 c. 500,000 d. 300,000

2. What is the goodwill arising from the acquisition on January 1, 2020?

a. 3,000,000 b. 2,000,000 c. 2,500,000 d. 0

3. What total amount of income should be recognized by the investor in 2020?

a. 2,000,000 b. 2,500,000 c. 2,300,000 d. 1,800,000

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

4. What is the carrying amount of the investment in associate on December 31, 2020?
a. 12,550,000 b. 12,350,000 c. 11,950,000 d. 12,750,000

SUGGESTED SOLUTIONS:

Question 1 Answer B
Dividend income (10% x 1,000,000) 100,000
Under cost method, the investment income is based on dividend declared or paid.

Question 2 Answer B
Existing 10% interest remeasured at fair value 3,500,000
New 15% interest 8,500,000
Total cost – January 1, 2020 12,000,000
Net assets acquired (25% x 36,000,000) (9,000,000)
Excess of cost over carrying amount 3,000,000
Excess attributable to equipment whose fair value is greater than
carrying amount (25% x 4,000,000) ( 1,000,000)
Goodwill 2,000,000

Question 3 Answer C
Share in net income (25% x 8,000,000) 2,000,000
Amortization of excess attributable to equipment (1,000,000 / 5 years) ( 200,000)
Net investment income 1,800,000

Fair value of 10% interest 3,500,000

Historical cost 3,000,000
Remeasurement gain 500,000
Net investment income 1,800,000
Total income in 2020 2,300,000
If the investment in associate is achieved in stages the old interest is remeasured at fair
value through profit or loss.

Question 4 Answer A
Total cost 1/1/2020 12,000,000
Net investment income 1,800,000
Share in cash dividend (25% x 5,000,000) ( 1,250,000)
Carrying amount – 12/31/2020 12,550,000

Self-Help: You can also refer to the sources below to help you
further understand the lesson:
*Cabrera, M.E. (2017). Applied auditing. (2017 ed.). Manila, Philippines: GIC
Enterprises & Co., Inc.

*Roque, G.S. (2018). CPA examination reviewer: auditing problems. (2018-2019

ed.). Manila: GIC Enterprises & Co., Inc.

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

Let’s Check
Activity 1. Mutiple Choice Questions. Encircle the letter that corresponds to your
answer.
1. A client has a large and active investment portfolio that is kept in a bank safe-
deposit box. If the auditor is unable to count the securities at the balance sheet
date, the auditor most likely will
a. Request the bank to confirm to the auditor the contents of the safe deposit box
at the balance sheet date.
b. Examine supporting evidence for transactions occurring during the year.
c. Count the securities at a subsequent date and confirm with bank whether
securities were added or removed since the balance sheet date.
d. Request the client to have a bank seal the safe-deposit box until the auditor can
count the securities at a subsequent date.

2. When an auditor is unable to inspect and count a client’s investment securities until
after the balance sheet date, the bank where the securities are held in a safe
deposit box should be asked to
a. Verify any differences between the contents of the box and the balances in the
client’s subsidiary ledger.
b. Provide a list of securities added and removed from the box between the
balance sheet date and the security count date.
c. Count the securities in the box so that the auditor will have an independent
direct verification.
d. Confirm that there has been no access to the box between the balance- sheet
date and the security-count date.

3. Which of the following is not one of the auditor’s primary objectives in an audit of
trading securities?
a. To determine whether securities are authentic.
b. To determine whether securities are the property of the client.
c. To determine whether securities actually exist.
d. To determine whether securities are properly classified on the balance sheet
date.

4. Apol Boba, CPA, observes the count of securities on December 31. She records
the serial numbers of the securities and reconciles them and the number of shares
with company records. Which fraud should be detected by this procedure?
a. An investee company declared and paid a stock dividend on December 15. The
stock certificate for the additional shares was received directly by the treasurer
who made no record of the receipt and embezzled the shares.
b. The treasurer embezzled and sold securities on April 4. She speculated
successfully with the proceeds and replaced the securities on December 29.
c. The treasurer borrowed securities on July 15 to use as collateral for a personal
loan. He repaid the loan and returned the securities on December 2.
d. The treasurer embezzled interest receipts from bonds by having the payments
mailed directly to him.

5. Which of the following is the least effective audit procedure regarding the existence
assertion for the securities held by the auditee?

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

a. Examination of paid checks issued in payment of securities purchased.

b. Vouching all changes during the year to supporting documents.
c. Simultaneous count of liquid assets.
d. Confirmation from the custodian.

6. An auditee is holding equity securities as collateral for a debt. The auditor should
a. Determine from data published in the financial press that the auditee has
recorded dividend income from the collateral.
b. Ascertain the value of the securities.
c. Ascertain that the amount recorded for the collateral in the investment account
is equal to its fair value at the balance sheet date.
d. Verify that the client has taken title to the securities.

7. Which of the following is the most effective audit procedure for verification of
dividends earned on investments in equity securities?
a. Tracing deposited dividend checks to the cash receipts book.
b. Reconciling amount received with published dividend records.
c. Comparing the amounts received with preceding year dividends received.
d. Recomputing selected extensions and footings of dividend schedules and
comparing totals to the general ledger.

8. In confirming with an outside agent, such as a financial institution, that the agent is
holding investment securities in the client’s name an auditor most likely gathers
evidence in support of management’s financial statement assertions of existence
and
a. Valuation c. Completeness
b. Rights and obligations d. Presentation and disclosure

9. In establishing the existence and ownership of an investment held by a corporation

in the form of publicity traded stock and auditor should inspect the securities or
a. Obtain written representations from management confirming that the securities
are properly classified as trading securities.
b. Inspect the audited financial statements of the investee company.
c. Confirm the number of shares held by an independent custodian.
d. Determine that the investment is carried at the lower of cost or market.

10. An auditor most likely to verify the interest earned on bond investment by
a. Verifying the receipt and deposit of interest checks.
b. Confirming the bond interest rate with the issuer of the bonds.
c. Recomputing the interest earned on the basis of face amount, interest rate, and
period held.
d. Testing controls relevant to cash receipts.

11. Which of the following provides the best form of evidence pertaining to the annual
valuation of an investment in which the independent auditor’s client owns a 30%
voting interest?
a. Market quotations of the investee company’s stock.
b. Current fair value of the investee company’s assets.
c. Historical cost of the investee company’s assets.
d. Audited financial statements of the investee company.

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

12. In verifying the amount of goodwill recorded by a client, the most convincing
evidence an auditor can obtain is by comparing the recorded value of assets
acquired with the
a. Assessed value as evidenced by tax bills.
b. Seller’s book value as evidenced by financial statements.
c. Insured value as evidenced by insurance policies.
d. Appraised value as evidenced by independent appraisals.

13. The auditor can best verify a client’s bond sinking-fund transactions and year-end
balance by
a. Confirmation with individual holders of retired bonds.
b. Confirmation with the bond trustee.
c. Recomputation of interest expense, interest payable, and amortization of bond
discount or premium.
d. Examination and count of the bonds retired during the year.

14. An auditor who physically examines securities should insist that a client
representative be present in order to
a. Detect fraudulent securities.
b. Lend authority to the auditor’s directives.
c. Coordinate the return of securities to the proper locations.
d. Acknowledge the receipt of securities returned.

15. In testing long-term investments, an auditor ordinarily would use analytical

procedures to ascertain the reasonableness of the
a. Classification between current and noncurrent portfolios.
b. Valuation of marketable equity securities.
c. Existence of unrealized gains or losses in the portfolio.
d. Completeness of recorded investment income.

Let’s Analyze
Activity 1. Answer the following problems. Show your solution in proper format.
PROBLEM 1
In connection with your audit of the financial statements of the GOLD Company for the year
2019, the following Available for Sale Securities and Dividend Income accounts were
presented to you:
Available for Sale Securities
Date Description Ref. Debit Credit
01/08 Purchased 20,000 shares
common, par value P50,
BUSTOS Co. VR-69 780,000
03/30 10,000 shares BUSTOS Co.
received as stock dividend CJ-30 500,000
04/03 Sold 10,000 shares @ P25 CR-44 250,000
12/02 Sold 4,000 shares @ P60 CR-65 240,000

Dividend Income
Date Description Ref. Debit Credit

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

03/30 Stock dividend SJ-8 500,000

08/30 BUSTOS Company common CR-52 100,000

The following information was obtained during your examination:

1. From independent sources, you determine the following dividend information:
Type of Dividend Date Date of Date of
Declared Record Payment Rate
Stock 02/14/2019 02/28/2019 03/30/2019 50%
Cash 08/01/2019 08/15/2019 08/30/2019 P5/share
Cash 12/01/2019 12/15/2019 01/02/2020 20%
2. Closing market quotation as at December 31, 2019:
Bid Asked
BUSTOS Company common 13-3/4 16-1/2

QUESTIONS:
Based on the above and the result of your audit, answer the following:
1. How much is the gain or loss on the April 3, 2019 sale?
a. P10,000 loss c. P140,000 loss
b. P10,000 gain d. P 0
2. How much is the gain on the December 2, 2019 sale?
a. P136,000 c. P84,000
b. P 96,000 d. P 0
3. How much is the total dividend income for the year 2019?
a. P600,000 c. P100,000
b. P800,000 d. P300,000
4. How much is the adjusted balance of Available for Sale Securities as of December 31,
2019?
a. P290,000 c. P220,000
b. P264,000 d. P416,000
5. How much is the Unrealized Loss on AFS as of December 31, 2019?
a. P196,000 c. P152,000
b. P 70,000 d. P 0

PROBLEM 2
DIAMOND Inc. acquired 30% of EMERALD Co.’s voting stock for P200,000 on January 2,
2019. DIAMOND’s 30% interest in EMERALD gave DIAMOND the ability to exercise
significant influence over EMERALD’s operating and financial policies. During 2019, EMRALD
earned P80,000 and paid dividends of P50,000. EMERALD reported earnings of P100,000 for
the six months ended June 30, 2020, and P200,000 for the year ended December 31, 2020.
On July 1, 2020, DIAMOND sold half of its stock in EMERALD for P150,000 cash. EMERALD
paid dividends of P60,000 on October 1, 2020.
1. Before income taxes, what amount should DIAMOND include in its 2019 income
statements as a result of investment?
a. P15,000 b. P24,000 c. P50,000 d. P80,000
2. In DIAMOND’s December 31, 2019 balance sheet, what should be the carrying
amount of this investment?
a. P200,000 b. P209,000 c. P224,000 d. P230,000

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 Department of Accounting Education
Mabini Street, Tagum City
Davao del Norte
Telefax: (084) 655-9591, Local 116

3. In its 2020 income statement, what amount should DIAMOND report as gain from the
sale of half of its investment?
a. P24,500 b. P30,500 c. P35,000 d. P45,500

PROBLEM 3
On July 1 of the current year, ASH Company acquired 25% of the outstanding shares of
common stock of Adis Co., at a total cost of P1,400,000. The underlying equity (net assets)
of the stock acquired by ASH Company was only P1,200,000. ASH Company was willing to
pay more than book value for the Adis Company stock for the following reasons:
a. Adis Company owned depreciable plant assets (10-year remaining economic life)
with a current fair value of P120,000 more than their carrying amount.
b. Adis Company owned land with a current fair value of P600,000 more than its carrying
amount.
c. ASH Company believed Adis Company possessed enough goodwill to justify the
remainder of the cost.

Adis Company earned net income of P1,080,000 evenly over the current year ended
December 31. On December 31, Adis Company declared and paid a cash dividend of
P210,000 to common stockholders. Market value of Adis Company’s share of the stock at
December 31 is P1,500,000. Adis Company closes its accounting records on December 31.
As of December 31, 2017, the Investment in Adis common has a balance of P1,400,000.

ASH Company has a portfolio of current marketable equity securities. Information on cost
and market value is as follows:
Cost Market
December 31, 2016 P 950,000 950,000
December 31, 2017 840,000 820,000
ASH Company has not recorded yet any allowance for market decline in its marketable
securities. Marketable Securities at December 31, 2017 has a balance of P840,000.

Presented below is an amortization schedule related to ASH Company’s 5-year, P100,000

bond with a 7% interest rate and a 5% yield, purchased on December 31, 2014, for P108,660.
Date Cash Interest Bond Premium Carrying Value
Received Income Amortization of bonds
12/31/14 108,660
12/31/15 P 7,000 P 5,433 P 1,567 107,093
12/31/16 7,000 5,354 1,646 105,447
12/31/17 7,000 5,272 1,728 103,719
12/31/18 7,000 5,186 1,814 101,905
12/31/19 7,000 5,095 1,904 100,000

As of December 31, 2017, the Investment in bonds is recorded in the balance sheet at
P108,660.

Questions
1. The Investment in Adis Company common at year-end is:
a. P 1,473,000 b. P 1,478,500 c. P 1,480,500 d. P 1,481,000
2. The income from investment in the Adis Company common at year-end is:
a. P 131,000 b. P 133,500 c. P 159,250 d. P 185,500
3. The marketable securities at December 31, 2017 is:
a. P 820,000 b. P 840,000 c. P 930,000 d. P 950,000

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Mabini Street, Tagum City
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Telefax: (084) 655-9591, Local 116

4. The amortization of investment in bonds at year-end is:

a. P 1,728 b. P 4,941 c. P 6,669 d. P 7,000
5. Interest income from the investment in bonds at year-end is:
a. P 7,000 b. P 5,354 c. P 5,272 d. P 5,186
6. The investment in bonds at year-end is:
a. P 108,660 b. P 105,447 c. P 103,719 d. P 100,000

In a Nutshell
In this part you are going to jot down what you have learned in this unit. The
said statement of yours could be in a form of concluding statements, arguments, or
perspective you have drawn from this lesson.

1. ________________________________________________________.

2. ________________________________________________________.

3. ________________________________________________________.

4. ________________________________________________________.

5. ________________________________________________________.

Q&A List
In this section you are going to list what boggles you in this unit. You may
indicate your questions but noting you have to indicate the answers after your question
is being raised and clarified. You can write your questions below.

Questions/Issues Answers
1.
2.
3.
4.
5.

Keywords
 Audit of investment balances
 Equity Instruments
 Debt Instruments

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