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Assignment: Financial Asset at Fair Value Name: Score: Section

The document provides two problems involving accounting for financial assets at fair value. Problem 1 requires journal entries for six cases of investments where the fair value changes from the purchase date to year-end for two years. Problem 2 provides additional details on three investments held and requires journal entries for the initial purchase, fair value changes in the first year, and sales of portions of the investments in the second year. The problems test understanding of accounting for investments elected to be measured at fair value through other comprehensive income.

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51 views1 page

Assignment: Financial Asset at Fair Value Name: Score: Section

The document provides two problems involving accounting for financial assets at fair value. Problem 1 requires journal entries for six cases of investments where the fair value changes from the purchase date to year-end for two years. Problem 2 provides additional details on three investments held and requires journal entries for the initial purchase, fair value changes in the first year, and sales of portions of the investments in the second year. The problems test understanding of accounting for investments elected to be measured at fair value through other comprehensive income.

Uploaded by

Anjelica Marco
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PAMANTASAN NG LUNGSOD NG VALENZUELA

Intermediate Accounting I
Assignment: Financial Asset at Fair Value

NAME: SCORE: SECTION:

PROBLEM:

Problem 01. ABCDEFGHIJKLMNOP Company invested its excess cash in equity securities during 2016. The
company make an irrevocable election to present in other comprehensive income the subsequent changes in fair
value for these investments.

Case 1 Case 2 Case 3 Case 4 Case 5 Case 6


Cost at Purchase
P 90,000 P 90,000 P 90,000 P 90,000 P 90,000 P 90,000
Date (01/01/2016)
Fair Value at
75,000 75,000 75,000 100,000 100,000 100,000
December 31, 2016
Fair Value at
70,000 80,000 95,000 105,000 93,000 86,000
December 31, 2017

Requirement:
For every case, prepare the necessary journal entry on December 31, 2016 and December 31, 2017.

Problem 02. QRSTUVWXYZ Corporation invested its excess cash in equity securities during 2016. The
company make an irrevocable election to present in other comprehensive income the subsequent changes in fair
value for these investments.

Cost Market Value


Investment
01/01/2016 12/31/2016
AAA Ordinary Shares, 10,000 shares P 1,000,000 P 900,000
BBB Ordinary Shares, 20,000 shares 1,500,000 1,850,000
CCC Preference Shares, 30,000 shares 1,200,000 1,050,000

During 2017, QRSTUVWXYZ Corporation sold half of its investment in AAA Company for P500,000. It also
sold one-third of its investment in CCC Company for P275,000 and one-fourth of its investment in BBB
Company for P400,000.

At the end of the 2017, the quoted prices of the investments are as follows:
AAA Ordinary shares P 105
BBB Ordinary shares 88
CCC Preference shares 36

Requirement: Prepare all the necessary journal entries for 2016 and 2017 transactions.

FAR3: Assignment – Financial Assets at Fair Value (2018-2019, 2nd Semester) jvacpa Page 1 of 1

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