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Thursday, August 12, 2010

Valix Finacc vol 1 Problem 9-21 to 27

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 9-21 to 27



Problem 9-21


Question 1 – Answer  B

            Market value – December 31, 2008                                                               1,550,000
            Market value – December 31, 2007                                                               1,000,000
            Unrealized gain – trading                                                                                 550,000


                                                                                                                127


Question 2 – Answer  A

            Market value – December 31, 2008                                                               1,300,000
            Market value – December 31, 2007                                                               1,200,000
            Unrealized gain in 2008                                                                                     100,000
            Unrealized loss – December 31, 2007 (1,500,000 – 1,200,000)                       (   300,000)
            Net unrealized loss – December 31, 2008                                                    (   200,000)

Problem 9-22  Answer  A


The unrealized loss of P40,000 on trading securities is shown in the income statement.

However, the unrealized loss of P100,000 on available for sale securities is recognized in
equity.

Problem 9-23  Answer  B                                

Unrealized losses                                                                                                           260,000     
Unrealized gains                                                                                                             40,000     
Net unrealized loss – December 31, 2008                                                                     220,000

Problem 9-24  Answer  B


Net sales price                                                                                                          1,450,000
Unrealized loss related to B                                                                                     (   150,000)
Net amount                                                                                                             1,300,000
Carrying amount of B                                                                                              (1,550,000)
Loss on sale                                                                                                             (   250,000)
                       
Net sales price (1,500,000 – 50,000)                                                                           1,450,000
Less: Cost of B                                                                                                           1,700,000
Loss on sale                                                                                                             (   250,000)
                       

Problem 9-25  Answer  C                  

                                         
Market value – December 31, 2008                                                                             850,000
Market value – December 31, 2007                                                                             800,000
Unrealized gain in 2008                                                                                                  50,000
Unrealized loss – December 31, 2007                                                                          (200,000)
Net unrealized loss – December 31, 2008                                                                   (150,000)

Problem 9-26  Answer  C


Available for sale equity securities, at cost                                                              2,200,000
Unrealized loss                                                                                                         (   200,000)
Market value                                                                                                           2,000,000


                                                                                                             128

 

Problem 9-27  Answer  C


12/31/2007       Unrealized loss - AFS                                                   200,000
                              Available for sale securities                                                           200,000                                     (2,000,000 – 1,800,000)

12/31/2008       Available for sale securities                                        50,000
                              Unrealized loss – AFS (1,850,000 – 1,800,000)                                    50,000

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