1) On January 2, 2014, PARAGON Company acquired 16,000 ordinary shares

of Hexagon Company at P50 per share. On July 1, 2014, the Hexagon

ordinary share was split 5 to 1. On October 1, 2014, Paragon received from
Hexagon a preference share dividend of one share for every 10 ordinary
shares held. On this date, the market price of Hexagon ordinary is P15 per
share and preference, P10 per share. On December 31, 2014, Paragon
received from Hexagon a dividend in kind of one share of Octagon Company
ordinary share for every 4 Hexagon ordinary shares held. The market price of
Octagon ordinary is P5 per share. In its 2014 statement of comprehensive
income, how much should Paragon report as dividend income?

2) Guess Company purchased 50,000 shares (5% ownership) of Fortune

Company on the market price of the share is P40. On November 30, Guess
paid P20 January 2, 2014. Guess received a share dividend of 15% on March
31, 2014 when share special assessment on the shares. On December 15,
2014, Guess paid a cash dividend of P8 per share. In the December 31, 2014
statement of comprehensive income of Guess Company, what amount
should

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3) Kikay Corp. has the following transactions on the dates shown:
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2014
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Aug 1 - Purchased 1,000 shares of Makati Co. for P60,000. (Lot 1)

Oct. 1 - Purchased 8,000 shares of Makati Co. for P560,000. (Lot 2)
2015
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Jul 1 - Purchased 6,000 shares of Makati Co. for P480,000. (Lot 3)

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Aug. 1 - Sold 5,000 shares of Makati Co. for P500,000. (Use FIFO.)
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2016
Feb. 1 - Received 50% stock dividend.
Nov. 1 - Received stock rights (Right issue) to purchase one new share at P60
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for every 5 rights tendered. On this date, the share is selling ex-right at P70
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and the right at P10.

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Dec. 1 - Sold all stock rights at P15 per right.

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4) Civil Co. owns 40,000 shares purchased for P 75 per share as noncurrent
investment. The following transactions pertain to such investment in the
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chronological order: Received stock rights to purchase one new share at P 80

Tw0 rights are required to acquire one share. The market value of the share
and rights at issuance date are P 90 and P 10, respectively. Exercised 30,000
rights. Sold 6,000 rights at P 12 per right. The remaining rights expired. How
much is the loss on stock rights resulting from the expiration of the same?

5) Comfort Company purchased 10,000 shares of Abel ordinary shares at P90

per share on January 2, 2014. On December 31, 2014, Comfort received
2,000 shares of Abel ordinary share in lieu of cash dividend of P10 per share.

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 On this date, the Abel ordinary share has a quoted market price of P60 per
share. In its 2014 statement of comprehensive income, how much should
Comfort report as dividend income?

6) Soprano Co. acquired 50,000 ordinary shares of Alto Co. on Sept. 30, 2015
for P8,250,000. On Oct. 30, the shares were split into a 2:1 basis. On Nov. 30,
2016, Alto distributed 10% ordinary shares dividends when the market price
of the share was P100 per share. On Dec. 31, 2016, Soprano sold 6,000 of its
Alto shares for P600,000. For the year ended December 31, 2016, how much
should Soprano report as gain on sale of investment?

7) On January 2, 2014, Lotus Company purchased 8,000 shares of Pearl Co.

at P100 per share and designated the equity investment at Fair Value to
other comprehensive income. Brokerage fees of P24,000 and tax of P4,000
were paid on the same date. A P5 dividend per share of Pearl had been
declared on December 17, 2013 to be paid on March 1, 2014 to shareholders

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of record on January 31, 2014. On July 31, 2014, Lotus Company received a

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10% share dividend and also paid P10 for each share on December 31, 2014

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as special assessment. Assuming Lotus Company investment in Pearl
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Company has a total market value of P900,000 as of December 31, 2014,

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what amount of unrealized gain before tax should be shown in the statement
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of comprehensive income?
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If market value of Pearl Company securities is not clearly determinable as of

December 31, what is the unit cost for each share on December 31, 2014?
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8) Achilles Co. has the following long-term investments on hand on Jan. 1,

2014: Investment in SMC Co. preference shares, 12%, P 200 par, 5,000
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shares P 1,200,000 Investment in Benguet ordinary shares, 10,000 shares

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1,000,000 During the year, the following transactions were completed:

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Purchased 4,000 ordinary shares of ANA for P 300,000 Received 2,000

ordinary shares of Benguet in lieu of a cash dividend of P 10 per share. On
this date, Benguet ordinary shares has a quoted market price of P 60.
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Purchased 6,000 shares of ANA ordinary shares for P 420,000. Received

semiannual dividend on SMC Co. 12 % preference shares. ANA ordinary share
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was split on a 2-for-1 basis. Sold 8,000 ordinary shares of ANA Company at P
85 less transactions costs of 5 %. Use FIFO. How much should be recognized
as dividend income, if any, for transaction 2?
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9) Giggs Co. purchased 10,000 shares representing 2 % ownership of Rooney

Co. on February 11, 2014. Giggs received a share dividend of 2,000 shares
on March 31, 2014, when the carrying amount per share on Rooney's books
was P 350 and the market value per share was P 400. Rooney paid a cash
dividend of P 15 per share on September 15, 2014. In Giggs' income
statement for the year ended October 31, 2014, what amount should be
reported as dividend income

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 10) On September 30, 2016, Pilgrims Company exchanged equipment for
2.500 Sale shares of Theme Company's ordinary share. On that date, the
equipment had a carrying value of P250,000 and its fair market value was
not clearly determinable. The par value of Theme's share was P80 per share
but its market value on September 30, 2016 is P90 per share. What is the
cost of the investment?

11) On January 1, 2014, Falk Co purchased 50,000 shares of Milo ordinary

shares for P3,600,000. On December 31, 2014. Falk received 50,000 stock
rights from Milo Each right entitles the holder to acquire one share for P 85.
The market price of Milo's share was P 100 a share immediately before the
rights were issued, and P 90 a share immediately after the rights were
issued. Falk sold its rights on December 31, 2014 for P 15 a right. What is
Falk's gain from the sale of rights?
12) Threshold Company purchased 20,000 shares out of 200,000 shares

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outstanding of Power Company's ordinary shares on February 23, 2014 for

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P924,000. Threshold Company has designated the equity security at Fair

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Value to other comprehensive income. Threshold received a P40,000 cash
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dividend on Power Company on July 1, 2014 Power declared a 10% share

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dividend on December 1, 2014 to shareholders of record as of December 31,
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2014. The dividend was distributed on January 31, 2015. The market price of
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the share was P38 on December 1, 2014, P40 on December 31, 2014 and
P42 on January 31, 2015. What amount should Threshold record as dividend
revenue for the year ended December 31, 2014?
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13) The following transactions for the current year relate to the permanent
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investments of Living Colour Co.:

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 Purchased 10,000 shares of ABC Co.P 100 par value ordinary for P
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720,000.
 Received 20 % share dividend.
 Sold the share dividends at P 70 per share.
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 Exchanged 5,000 shares of ABC ordinary for 10,000 ABC preference

shares. At the time of the exchange, ABC ordinary is selling at P 70 and
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ABC preference at P 40.

ABC Co, made special assessment of P 20 per share on all ordinary
shareholders. Living Colour accordingly paid the assessment. What is the net
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effect of the transactions for the current year to the investment account?

14) Dancer Company purchased 40,000 shares of Lancer Corp's newly issued
6%, cumulative preference shares, P50 par for P3,040,000 on May 9, 2014.
Each share carried one detachable share warrants entitling the holder to
acquire at P60 one share of Lancer ordinary shares. On May 9, 2014, the
market price of the preference shares ex-warrant was P69 per share and the
market price of the share warrant was P6 per warrant. On December 31,

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 2014, Dancer sold stock warrants for P295,000. What is the gain on sale of
the warrants?

15) On January 4, 2015 Phone Co. purchased 10,000 shares (10%) of the
outstanding ordinary shares of Pal, Inc. for P25 per share. The purchase was
appropriately designated as investment to other comprehensive income. The
market price of the share was P24 per share on December 31, 2015. During
2016, Pal experienced severe financial difficulties and Phone disposed of its
entire investment in Pal share for P15 per share on Nov. 9, 2016. In its 2016
statement of comprehensive income, how much should Phone report as loss
from disposal of the long-term investment?
16) On 1 August 2024, Camby & Co. acquired $60,000 face value 10% bonds
of Hanson Ltd at 104 plus accrued interest. The bonds mature on 30 April
2031, with interest payable each 31 October and 30 April. Camby & Co. has a
business model of holding to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to cash
flows are solely payments and interest on the principal amount outstanding.

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What entry should Camby make to record the purchase of the bonds on 1

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August 2024?

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17) The following accounts appeared on the statement of financial position of
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Serafin Company on January 1, 2022:

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Noncurrent assets:
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Investment in equity securities 4,000,000
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Securities fair value adjustment (500,000)

Market Value 3,500,000
Retained Earnings 9,500,000
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Other Comprehensive Income-UL (500,000)

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An analysis of the investment portfolio revealed the following on December

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31, 2022
Security Cost Market Value
XYZ ordinary share 1,000,000 1,200,000
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ABC ordinary share 2,500,000 2,000,000

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RST preference share 500,000 400,000

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Assuming no other transaction occur during 2023, the balance of the

retained earnings to be reported in the statement of financial position is:
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How much should be included in the other comprehensive income section

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statement of comprehensive income for the year 2022?

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18) Information regarding Ramon Co.'s portfolio of Financial Assets through

other comprehensive income is as follows:
Aggregate cost - December 31, 2022 1,700,000
Unrealized gains - December 31, 2022 40,000
Unrealized losses - December 31, 2022 260,000
Net realized gains during 2022 300,000
On January 1, 2022, Ramon reported an unrealized loss of P 15,000 as a
component of other comprehensive income. In its 2022 statement of
changes in equity, Ramon should report what amount of unrealized loss on
these securities?

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 19) On its December 31, 2022 statement of financial position, Calhoun
Company appropriately reported a $10,000 debit balance in its Securities Fair
Value Adjustment account. There was no change during 2023 in the
composition of Calhoun's portfolio of equity securities measured at fair value
through other comprehensive income. The following information pertains to
that portfolio:
Security Cost Fair value on 12/31,2023
X 125,000 160,000
Y 100,000 95,000
Z 175,000 125,000
What amount of unrealized loss on these securities should be included in
Calhoun Statement of changes in equity at December 31, 2023?

20) Jerry Orasa Co. has the following investments in its investments portfolio

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on December 31, 2022 (all investments were purchased in 2022):

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1) 3,000 ordinary shares of Mark De Vera Co. which cost P58,500

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2) 10,000 ordinary shares of Mon Corp. which cost P580,000, and
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3) 6,000 preference shares of Rolyn Toyota Co, which cost P255,000. The

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securities Fair Value Adjustment account shows a credit of P10,100 at the
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end of 2022 with the following breakdown Mark De Vera Co. P300, Mon
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Corp.P5,800, and Rolyn Toyota Co. P4,000.

In 2023, Jerry Orasa completed the following investment transactions:
1) On January 15, sold ordinary shares of Mark De Vera at P22 per share less
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fees of P2,150.
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2) On April 17, purchased 1,000 ordinary shares of Casey at P33.50 per share
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plus fees of P1,900.

On December 31, 2023, the fair values per share of these investments were
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Mon Corp. P61, Rolyn Toyota Co. P40, and Casey P29. Jerry Orasa classifies
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these investments as trading. How much was the gain on sale on January 15,
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2023?
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21) During 2022, Cinderella Co. purchased trading equity securities as a

short-term investment. The cost and market value at December 31, 2022
were as follows:
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Security Cost Market Value

A-1,000 shares ₱ 200,000 ₱ 300,000
B-10,000 shares 1,700,000 1,600,000
C-20,000 shares 3,100,000 2,900,000
Cinderella sold 10,000 shares of Company B on January 15, 2023, for P 130
per share incurring P50,000 in brokerage commission and taxes. On the sale,
Cinderella should report a loss of

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 22) Data regarding Ted Co.'s trading securities follow:
Cost Market Value
December 31, 2022 5,000,000 4,600,000
December 31, 2023 5,000,000 4,800,000
Differences between cost and market value are considered temporary. In the
2023 income statement, what amount should be reported as unrealized gain
on these securities?

23) Dyckman Dealers has an investment in Thomas Corporation that

Dyckman accounts for as a trading security. Thomas Corporation stares are
publicly traded on the New York Stock Exchange, and the prevailing price on
that exchange indicates that Dyckman's investment is worth $20,000.
However, Dyckman management believes that the stock market is generally
overvalued, and their analysis of the Thomas investment suggests to them
that it is worth $18,000. Dyckman should carry the Thomas investment on its
statement of financial position at:

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24) Pampano Company carries the following marketable equity securities on

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its books at December 31, 2022 and 2023. All securities were purchased
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during 2022. Cost Fair Value 12/31/22 12/31/23 Trading Securities: Abacus
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Co. 500,000 260,000 400,000 Belle Inc. 260,000 400,000 400,000 Cathay
Pacific Co. 700,000 600,000 500,000 Total 1,460,000 1,260,000 1,300,000
FA@FVOCI: Dragon Air Co. 4,100,000 3,600,000 3,600,000 East West Co.
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1,000,000 1,200,000 1,400,000 Total 5,100,000 4,800,000 5,000,000 The net

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amount to be recognized in the 2022 profit or loss is:

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25) Hawk Corporation purchased 10,000 shares of Diamond Corporation

stock in 2020 for $50 per share and classified the investment as securities at
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fair value through other comprehensive income. Diamond's market value

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was $60 per share on December 31, 2021 and $65 on December 31, 2022.
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During 2023, Hawk sold all of its Diamond stock at $70 per share. In its 2023
income statement, Hawk would report:
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26) Sloan & Co.'s financial assets at fair value through profit and loss
portfolio which is appropriately included in current assets is as follows:
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31 Dec 2024
Cost Fair Value Unrealized Gain (Loss)
Arlington 260,000 210,000 $(50,000)
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Downs & Co. 245,000 265,000 20,000

505,000 475,000 $(30,000)
Ignoring income taxes, what amount should be reported as a charge against
income in Sloan's 2024 income statement if 2024 is Sloan's first year of
operation

27) Denzel purchased 10,000 shares of Ronnil Co. for P150,000. At the date
of purchase, Denzel also paid 20,000 and 5,000 for brokers fees and
commission, respectively. Assuming that the purchase of shares do not give

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 rise to significant influence nor control, what amount should Denzel record its
financial asset?

28) On June 30, 2023, Sky Company, which uses PFRS 9, sold an investment
in other comprehensive income for P 1,200,000 This investment was
originally purchased at a cost of P800,000. At the time of disposal, the
carrying amount of the investment at fair value was P900,000. The
investment has a related fair value gain of P100,000 that was recognized in
the fair value reserve. What amount of unrealized gain or loss should be
transferred to retained earnings immediately after the sale?

29) On January 2, 2014, Ikola Co. acquired 40% of Surf Company by purchasing 8,000 shares for

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P1,440,000. On the date of acquisition, Ikola calculated that its share of the excess of the fair

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value over the book value of Surf’s depreciable assets was P150,000 and that the purchased
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goodwill P120,000. At the end of 2014, Surf reported net income of P450,000 and paid

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dividends of P7.00 per share. Ikola depreciates depreciable assets over a 12-year remaining life.
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What is the amount of income Ikola would report from its investment in Surf for the year ended
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December 31, 2014? P105,500 P167,500 P172,500 P56,000

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