1.
On December 31, 2009, Otter Company had investments in trading securities as follows: COST MARKET VALUE Man Company 1,000,000 1,300,000 Kemo Company 900,000 1,100,000 Fenn Company 1,100,000 900,000 3,000,000 3,300,000Otter's December 31, 2009 balance sheet should report the following trading securities at:
A. 
B. 
C. 
D. 
2.
On January 1, 2009, Fredo Company
purchased marketable equity securities to be held as "trading" for
P4,000,000. The company also paid commission to the stockbroker in the
amount of P100,000. No securities were sold during 2009. The market
value of the equity securities on December 31, 2009 is P4,500,000.What amount of unrealized gain on these securities should be reported in the 2009 income statement?
A. 
B. 
C. 
D. 
3.
On January 1, 2009, Trix Company
purchased marketable equity securities for P5,000,000 to be held as
"available for sale". The company also paid P200,000 in the form of
transaction costs. The equity securities had a market value of
P4,600,000 on December 31, 2009. No securities were sold during 2009.What amount of unrealized loss on these securities should be reported in the 2009 statement of changes in equity?
A. 
B. 
C. 
D. 
4.
Rose Company was organized on January 1,
2009. At December 31, 2009, Rose had the following investment portfolio
of marketable equity securities: TRADING AVAILABLE FOR SALE Aggregate Cost 3,000,000 4,500,000 Aggregate Market Value 2,400,000 3,700,000 Net Unrealized Loss 600,000 800,000All
of the declines are judged to be temporary. What amount of unrealized
loss should be shown as component of income and shareholders' equity?
A. 
Income: 600,000 Shareholder's equity: 800,000
B. 
Income: 800,000 Shareholder's equity: 600,000
C. 
Income: 1,400,000 Shareholder's equity: 0
D. 
Income: 0 Shareholder's equity: 1,400,000
5.
During 2009, Scotch Company purchased marketable equity securities to be held as "available for sale". Pertinent data follow: SECURITY COST MARKET VALUE at 12/31/09 D 360,000 400,000 E 800,000 600,000 F 1,800,000 1,860,000 2,960,000 2,860,000Scotch
appropriately carries these securities at market value. The amount of
unrealized loss on these securities in Scotch's 2009 income statement
should be:
A. 
B. 
C. 
D. 
6.
On its December 31, 2008 balance sheet,
Fry Company appropriately reported a P100,000 unrealized loss. There
was no change during 2009 in the composition of Fry's portfolio of
marketable equity securities held as "available for sale". Pertinent
data are as follows: SECURITY COST MARKET VALUE at 12/31/09 A 1,200,000 1,300,000 B 900,000 500,000 C 1,600,000 1,500,000 3,700,000 3,300,000What
amount of loss on these securities should be included in Fry's
statement of shareholders' equity for the year ended December 31, 2009?
A. 
B. 
C. 
D. 
7.
During 2008 Carr Company purchased
marketable equity securities as a trading investment. For the year
ended December 31, 2008, the company recognized an unrealized loss of
P230,000. There were no security transactions during 2009. Pertinent
information at December 31, 2009 is as follows: SECURITY COST MARKET VALUE A 2,450,000 2,300,000 B 1,800,000 1,820,000 4,250,000 4,120,000In its 2009 income statement, Carr should report:
A. 
Unrealized loss of P100,000
B. 
Unrealized loss of P130,000
C. 
Unrealized gain of P100,000
D. 
Unrealized gain of P130,000
8.
The following information was extracted from December 31, 2009 balance sheet of Phil Company:Noncurrent assets: Available for sale securities (carried at market) 3,700,000Shareholders' equity: Unrealized loss on available for sale securities ( 300,000)Historical cost of the long-term investment in available for sale securities was:
A. 
B. 
C. 
D. 
9.
La Goon Company purchased the following securities during 2009: CLASSIFICATION COST MARKET VALUE 12/31/09Security A Trading 900,000 1,000,000Security B Trading 1,000,000 1,600,000On
July 31, 2010, the company sold all of the shares of security B for a
total of P1,100,000. As of December 31, 2010, the shares of security A
had a market value of P600,000. No other activity occurred during 2008
in relation to the trading security portfolio. What is the gain or loss
on the sale of security B on July 31, 2010?
A. 
B. 
C. 
D. 
10.
During 2009, Lava Company purchased
trading equity securities as a short-term investment. The cost and
market value at December 31, 2009 were as follows: SECURITY COST MARKET VALUEA - 1,000 shares 200,000 300,000B - 10,000 shares 1,700,000 1,600,000C - 20,000 shares 3,100,000 2,900,000 5,000,000 4,800,000Lava
sold 10,000 shares of Company B stock on January 15, 2010, for P130 per
share, incurring P50,000 in brokerage commission and taxes. On the
sale, Lava should report a loss of
A. 
B. 
C. 
D. 
11.
On January 1, 2009 Libya Company
purchased equity securities to be held as "available for sale". On
December 31, 2009, the cost and market value were: COST MARKETSecurity X 2,000,000 2,400,000Security Y 3,000,000 3,500,000Security Z 5,000,000 4,900,000On
July 1, 2010, Libya Company sold Security X for P2,500,000. What amount
of gain on sale of AFS securities should be reported in the 2010 income
statement?
A. 
B. 
C. 
D. 
12.
On January 1, 2009, Cage Company
purchased equity securities to be held as "available for sale". The
cost and market value of the securities were: COST MARKET VALUE 12/31/09 MARKET VALUE 12/31/10Security R 3,000,000 3,200,000 --------Security S 4,000,000 3,500,000 3,700,000Security T 5,000,000 4,600,000 4,700,000On January 31, 2010, Cage Company sold Security R for P3,500,000.What is the gain or loss on the sale of Security R on January 31, 2010?
A. 
B. 
C. 
D. 
13.
On January 1, 2009, Cage Company purchased equity securities to be
held as "available for sale". The cost and market value of the
securities were:
COST MARKET VALUE 12/31/09 MARKET VALUE 12/31/10
Security R 3,000,000 3,200,000 --------
Security S 4,000,000 3,500,000 3,700,000
Security T 5,000,000 4,600,000 4,700,000
On January 31, 2010, Cage Company sold Security R for P3,500,000.What amount unrealized loss on these securities should be reported in the 2010 statement of changes in equity?
A. 
B. 
C. 
D. 
14.
During 2009, Giant Company purchased
trading securities as a short-term investment. The cost of the
securities and their market value on December 31, 2009 follow:SECURITY COST MARKET VALUE A 650,000 750,000 B 1,000,000 540,000 C 2,200,000 2,260,000At
the beginning of 2009, Giant had a zero balance in the market
adjustment for trading securities account. Before any adjustment
related to these trading securities, Giant had net income of
P3,000,000. What is the net income after making any necessary trading
security adjustment?
A. 
B. 
C. 
D. 
15.
On January 1, 2009, Hemingway Company
acquired 200,000 ordinary shares of Universe Company for P9,000,000. At
the time of purchase, Universe Company had outstanding 800,000 shares
with a book value of P36,000,000. On December 31, 2009, the following
events took place: * Universe Company reported net income of P1,800,000 for the calendar year 2009. * Hemingway Company received from Universe Company a dividend of P0.75 per ordinary share. * The market value of Universe Company share had temporarily declined to P40.The
investment in Universe Company is classified as available for sale.
What is the carrying value of the investment on December 31, 2009?
A. 
B. 
C. 
D. 
16.
Letterman Company reported the following selected balances on its financial statements for each of the three years 2009 - 2011: 2009 2010 2011Market adjustment - Trading securities 5,500,000 3,750,000 (1,200,000)Market adjustment - Available for sale securities (1,300,000) 900,000 1,350,000How much net unrealized loss should be shown in the 2011 income statement?
A. 
B. 
C. 
D. 
17.
Neil Company held the following marketable securities as trading investments at December 31, 2009: COST MARKET VALUE100,000 shares of Company A nonredeemable preference share capital, par value P75 775,000 825,0007,000 shares of Company B preference share capital, par value P100, subject to mandatory redemption by the issuer at par on December 31, 2010 690,000 625,000 1,465,000 1,450,000In the December 31, 2009 balance sheet, trading securities should be reported at:
A. 
B. 
C. 
D. 
18.
Data regarding Bondoc Company's trading securities follow: COST MARKETDecember 31, 2008 5,000,000 4,600,000December 31, 2009 5,000,000 5,800,000Differences
between cost and market value are considered temporary. The income
statement for 2009 should report unrealized gain on these securities at
A. 
B. 
C. 
D. 
19.
Data regarding Baggy Company's available for sale securities follow: COST MARKETDecember 31, 2008 4,000,000 3,500,000December 31, 2009 4,000,000 3,200,000Differences
between cost and market value are considered temporary. The
shareholders' equity section of the December 31, 2009 balance should
report unrealized loss on these securities at:
A. 
B. 
C. 
D. 
20.
Data regarding Maggy Company's available for sale securities follow: COST MARKETDecember 31, 2008 5,000,000 5,200,000December 31, 2009 5,000,000 5,900,000Difference
between cost and market value are considered temporary. The December
31, 2009 statement of shareholders' equity should report unrealized
gain on these securities at
A. 
B. 
C. 
D.