Question

Problem 15-10 (AICPA Adapted) 

During 2019, Knickknack Company purchased marketable equity securities to be measured at fair value through other comprehensive income. 

On December 31, 2019, the balance in the unreali zed loss on these securities was P200,000. 

There were no security transactions during 2020. Pertinent data on December 31, 2020 are: 

In the statement of changes in equity for 2020, what amount ASA) should be included as cumulative unrealized loss as component of other comprehensive încome? 

a. 500,000 b. 300,000 c.200,000 d. 0 

Problem 15-11 (AICPA Adapted) 

At the beginning of current year, Manifold Company began operations. The following information related to the portfolio of equity securities held for trading at year-end: 

The nontrading investments are measured at fair value through other comprehensive income. 

What amount should be reported as unrealized loss in the income statement for the current year? 

a.140,000 b. 186,000 c. 40,000 d. 56,000

Answer 1

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Answers is highlighted in yellow: Solution: Answer: 10) a. 500,000 Explanation: (2100000+1850000+1050000) 5000000 Cost Fair value (1600000+2000000+900000) 4500000 Cumulative Unrealized loss- oC 500000 Answer: 11) c. 40,000 Explanation: Trading Cost 360000 Fair value 320000 Unrealized on in Income statement 40000