On June 1, 2017, MamaMoRC Company purchased bonds with a face amount of 3,000,000 to be held to

maturity. The stated rate on the bonds is 10% but the bonds are acquired to yield 11%. The bonds mature
at the rate of 1,000,000 annually every May 31 starting May 31, 2018 and interest is payable annually also
on May 31. The entity used the effective interest method of amortizing discount.
1. What is the total amortization for 2018?
2. What is the carrying amount of the bond investment on December 31, 2019?

On January 1, 2017, Ryujin Domingo Company purchased bonds with face amount of 5,000,000. The entity
paid 4,600,000 plus transaction cost of 142,290. The bonds mature on December 31, 2019 and pay 6%
interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 105 on
December 31, 2017 and 110 on December 31, 2018.

Assumption #1: Assume that the business model in managing financial asset is to collect contractual cash
flows that are solely for payment of principal and interest and also to sell the bonds in an open market
1. What is the balance of unrealized gain-OCI on December 31, 2017?
2. What is the balance of unrealized gain-OCI on December 31, 2018?
Assumption #2: The entity has irrevocably elected to use the fair value option
3. What amount of gain from change in fair value to be reported in 2017?

On January 1, 2020, Dos Company acquired 1,500,000 ordinary shares of B Company at P25 per share.
At the time of purchase, B Company had outstanding 6,000,000 shares with a carrying amount of
P90,000,000.

The following information pertains to year 2020:

Net income of B Company 2,200,500.00
Dos Company received cash dividend
P1.50 per ordinary share
from B Company
Market Value of B Company's shares 20

Dos Company has no significant influence and has elected irrevocably to measure the investment at fair
value through other comprehensive income.
1. What is the carrying amount of the investment at year-end?
2. How much is the unrealized loss on financial asset-OCI at year-end?

During 2019, Tres Company acquired marketable equity securities intended for trading. For the year ended
December 31, 2019 the entity recognized an unrealized loss of P100,000. There were no transactions
relating to trading securities during 2020.

Tres Company provided the following information on December 31, 2020:

Security Cost Market Value
1 1,970,000.00 2,100,000.00
2 1,100,000.00 1,500,000.00
3,070,000.00 3,600,000.00
1. How much is the market value of the trading securities on December 31, 2019?
2. In the 2020 income statement, what amount should be reported as unrealized gain or loss?

On January 1, 2018, Maria Antonee Company acquired the following equity investments:
Purchase Transaction Fair Value- Fair Value-
Price Cost 12/31/2018 12/31/2019
Trading
1,000,000 100,000 1,200,000 800,000
Investment A
Trading
2,000,000 200,000 2,300,000 2,400,000
Investment B
Non-trading
3,000,000 300,000 3,100,000 -
investment C

On July 1, 2019, the entity sold half of the Trading Investment A for 950,000. On the same date, it also sold
the all the Non-trading investment C for 3,600,000.

1. What amount should be reported as net gain or net loss presented in profit or loss in the 2019 income
statement?

Mikee D. La Pena Company received dividends from ordinary share investments during the current year:
 5,000 shares of Tagpuan Company in lieu of cash dividend of P20 per share. The market price of the
share was P105. The entity had 50,000 shares of Tagpuan Company and owned 5% interest in
Company Tagpuan.
 A liquidating dividend from Patawad Company amounting to P600,000. The entity owned a 10% interest
in Patawad Company.
 The entity received from Ikaw Pa Rin Company a dividend in kind of one share of Paalam Company for
every 4 Ikaw Pa Rin Company shares held. The entity had 100,000 Ikaw Pa Rin Company shares which
have a market price of P50 per share. The market price of Paalam Company share was P10.
 The company owns 10,000 shares costing 1,100,000 from Malaya Company. Subsequently, the
company receives P150,000 in lieu of 1,000 shares originally declared as 10% stock dividend.
 The entity owned a 20% interest in Paubaya Company which declared and paid a P4,000,000 cash
dividend to shareholders on December 31.

1. What amount should be reported as dividend income for the current year?