Quiz 1: Investment in Equity (FVPL & FVOCI)

1. B
2. C
3. D
4. A
5. B
6. B
Equity investments at fair value, December 31, 2017
(4,000 x 106.70) P426,800

7. B
Shares remaining after sale (4,400 – 1,500) 2,900
Fair value per share on December 31, 2018 x P96.00
Equity investments , December 31, 2018 P278,400

8. A
Investment income is equal to the proceeds from sale (10,000 x 5) P50,000

9. C
Preference shares received (1,000/10) 100
Market value per preference share x P100
Dividend revenue P10,000

10. B
Dividend revenue (3,000 shares x P4.00) P12,000

11. D
No gain or loss is recognized on sale of equity investments at FVOCI.
The shares are adjusted to their fair value (which is the sales price) at
the time of sale. P0

12. P10,000

13. A
FVPL market value, December 31, 2019 P512,000
FVPL market value, December 31, 2018 541,000
Decrease in market value/Unrealized loss in 2019 P 29,000

14. A
Selling price of the securities P550,000
Carrying amount/fair value, December 31, 2019 512,000
Gain on sale P 38,000

15. B
FVOCI market value, December 31, 2019 P 980,000
FVOCI cost 1,000,000
Accumulated unrealized loss (debit), December 31, 2019 P 20,000
 Quiz 2: Investment in Associate

1. D
2. A
3. C
4. D
5. C
6. D
Income from associates for year 2016 (1.2M x 30% x 9/12) P270,000

7. B
Acquisition cost of investment P1,700,000
Share in income of associate 270,000
Cash dividends received (120,000 x P1.50) (180,000)
Investment carrying amount, December 31, 2016 P1,790,000

8. B
Investment carrying value, December 31, 2016 P4,840,000
Share in reported income (2.4M – 480,000) x 25% (480,000)
Cash dividends received during the year (60,000 + 80,000) 140,000
Acquisition cost of the investment P4,500,000

9. B
Acquisition cost P200,000
Share in income (10% x 1.5M) 150,000
Dividends received (10% x 900,000) (90,000)
Investment in Sharon, December 31, 2016 P260,000

10. A
Purchase price P510,000
Broker’s fees 5,100
Investment acquisition cost P515,100

11. C
Acquisition cost, July 1, 2015 P515,100
Share in income of associate (850,000 x 6/12 x 25%) 106,250
Cash dividends (25% x 320,000) (80,000)
Investment carrying amount, December 31, 2015 P541,350

12. B
Sales price of investment sold, net (275,000 – 2,750) P272,250
Carrying amount of investment sold (541,350 x ½) 270,675
Gain on sale P 1,575

13. D
Carrying amount of remaining securities reclassified to fair value
5,000 shares x 49 P245,000

14. C
Share in reported income (40M x 20%) P8,000,000
Share in the excess FV over CV
Plant (15M/5 x 20%) (600,000)
Inventory (5M x 20%) (1,000,000)
Investment income 2018 6,400,000

15. B
Investment Jan. 1 P20,000,000
Share in profit 6,400,000
Dividend (15m x 20%) (3,000,000)
Carrying value of investment in associates 23,400,000