Problem 15-8 (Alexis
Company)
At the beginning of
current year, Alexis
Company purchased
marketable equity
securities to be held as
"trading" for
P5,000,000. The entity
also paid transaction
cost amounting to
P200,000. The
securities had a market
value of P5,500,000 at
year-end and the
transaction cost that
would be incurred on
the sale is estimated at
P100,000. What
amount of unrealized
gain or loss on these
securities should be
reported in the income
statement for the
current year?
Fair Value 5,500,000
Acquisition
cost - (5,000,000)
Trading
Unrealized
gain -
included in 500,000
profit or
loss
Problem 15-9 (Carmela
Company)
At the beginning of
current year, Carmela
Company acquired
nontrading equity
instrument for
P4,000,000. The
transaction cost
incurred amounted to
P700,000. The equity
instrument is
irrevocably designated
as financial asset at fair
value through other
comprehensive income.
The fair value of the
instrument was
P5,500,000 at year-end.
What amount of gain
should be recognized in
other comprehensive
income for the current
year?
Componen
Amount
t
Fair Value 5,500,000
Initial (4,700,000
carrying )
amount
(P4,000,00
0+
Componen
Amount
t
P700,000)
Unrealized
800,000
gain - OCI
Problem 15-10
(Marigold Company)
At the beginning of
current year, Marigold
Company began
operations. The
nontrading investments
are measured at fair
value through other
comprehensive income
by irrevocable election.
What amount should
be reported as
unrealized loss as
component of other
comprehensive income
in the statement of
comprehensive income
for the current year?
Componen
Amount
t
Aggregate
Cost -
6,000,000
Nontrading
Portfolio
Aggregate (5,500,000
Fair Value - )
Componen
Amount
t
Nontrading
Portfolio
Unrealized
500,000
loss - OCI
Problem 15-11 (Baguio
Company)
In the year-end
statement of changes in
equity, what amount of
unrealized loss should
be reported as
component of other
comprehensive
income?
Component Amount
Unrealized
260,000
losses
Unrealized
(40,000)
gains
Net 220,000
cumulative
unrealized
Component Amount
loss -
component of
equity
Problem 15-12
(Strawberry Company)
During 2024,
Strawberry Company
purchased marketable
equity securities as
short-term investment
to be measured at
FVOCI. The entity sold
10,000 shares of B on
January 5, 2025, for
P1,450,000. What total
amount should be
charged to retained
earnings as a result of
the sale?
Componen
Amount
t
Original
Cost of 1,700,000
Security B
Componen
Amount
t
Final Sale (1,450,000
Proceeds )
Cumulative 250,000
loss
transferred
directly to
Componen
Amount
t
Retained
Earnings
Problem 15-13 (Jerome
Company)
On January 1, 2024,
Jerome Company
purchased nontrading
equity investments
which are irrevocably
designated at FVOCI.
On July 1, 2025, the
entity sold Security C
for P5,200,000. What
amount of gain on sale
should be recognized
directly in retained
earnings?
Componen
Amount
t
Sale
Proceeds - 5,200,000
Security C
Total Initial (4,400,000
Componen
Amount
t
Cost
(P4,000,00
)
0+
P400,000)
Cumulative 800,000
gain
Componen
Amount
t
transferred
directly to
Retained
Earnings
Problem 15-14 (Gil
Company)
Gil Company provided
the following
information on
December 31, 2024
regarding equity
investment: Financial
asset - FVOCI:
3,700,000; Unrealized
loss - OCI: (300,000).
Transaction cost of
P100,000 was
capitalized. What
amount should be
reported as historical
cost of the equity
investment?
Component Amount
Financial
asset at Fair
3,700,000
Value
(FVOCI)
Add back: 300,000
Cumulative
Unrealized
Component Amount
Loss
Historical
Cost
(inclusive of 4,000,000
transaction
costs)
Problem 15-15
(Remington Company)
At the beginning of
current year,
Remington Company
acquired 200,000
ordinary shares of
Universal Company for
P9,000,000. Remington
has elected irrevocably
to measure the
investment at FVOCI.
The market value of the
share at year-end had
declined to P40. What
is the carrying amount
of the investment at
year-end?
Component Amount
Number of
200,000
Shares
shares
Owned
Multiply by: x P40.00
Year-End
Market
Component Amount
Value per
share
Carrying
amount of
8,000,000
investment
at year-end