AP-004-C.

1 (Audit of Investments) Problem 1:

You were assigned to audit the ACHIEVEIT Corporation’s list of securities and other assets that may qualify as investment. In
studying the list, you came across a partial list of the accounts and ending account balance taken from the post-closing trial balance
of ACHIEVEIT Corporation on December 31, 2017 and shown as follows:
Transactions Amount
1) Equity securities of another neither company where neither control nor significant
influence exist. The corporation elected to report gains or losses in the
profits/losses P 100,000
2) Equity securities of another neither company where neither control nor significant
influence exist. The corporation elected to report gains or losses in the other
comprehensive income/losses 150,000
3) 20% equity securities of another company quoted in an active market 500,000
4) 51% equity securities of another company quoted in an active market 1,400,000
5) Equity securities of the corporation quoted in an active market reacquired with an
intention of reissuance in latter period for short-term profit
500,000
6) Debt security of another company quoted in an active market. Business model of
the corporation has an objective to hold debt securities for short-term profits
100,000
7) Debt security of another company quoted in an active market. Business model of
the corporation has an objective of collecting contractual cash flows from the
bonds which are primarily in the form of interests and principal
500,000
8) Real property held for resale in the ordinary course of business 500,000
9) Real property held for speculation purposes 700,000
10) Real property held as a current factory site 1,000,000
11) Real property of a manufacturing business being leased out to another party under
operating lease 900,000
12) Land held for undetermined future use 800,000
13) Land held to be used as a future plant site 400,000
14) Real property being developed as an investment property 300,000

Required:
1) Financial asset at fair value through profit or losses?
a) P0 c) P200,000
b) P100,000 d) P500,000
2) Financial asset at fair value through other comprehensive income?
a) P150,000 c) P200,000
b) P180,000 d) P350,000
3) Investment at amortized cost?
a) P0 c) P600,000
b) P500,000 d) P750,000
4) Investment in associate?
a) P0 c) P600,000
b) P500,000 d) P700,000
5) Investment in subsidiary?
a) P0 c) P1,200,000
b) P1,000,000 d) P1,400,000
6) Investment property?
a) P2,400,000 c) P2,800,000
b) P2,700,000 d) P3,100,000