Scribd Logo
Upload

Welcome to Scribd!

  • 11 views

    Chapter 4-Book Exercises

    Uploaded by

    Rita Angela DeLeon
    The document contains multiple problems involving calculations related to investments, including interest income, amortization, fair value, gains/losses, and dividends. It includes numerical data presented across multiple years for problems involving bonds, stocks, and equity investments. Calculations are shown for topics like present value, unrealized gains/losses, and share of net income from partial ownership.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    Chapter 4-Book Exercises

    Uploaded by

    Rita Angela DeLeon
    11 views3 pages
    The document contains multiple problems involving calculations related to investments, including interest income, amortization, fair value, gains/losses, and dividends. It includes numerical data presented across multiple years for problems involving bonds, stocks, and equity investments. Calculations are shown for topics like present value, unrealized gains/losses, and share of net income from partial ownership.

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document contains multiple problems involving calculations related to investments, including interest income, amortization, fair value, gains/losses, and dividends. It includes numerical data presented across multiple years for problems involving bonds, stocks, and equity investments. Calculations are shown for topics like present value, unrealized gains/losses, and share of net income from partial ownership.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    11 views3 pages

    Chapter 4-Book Exercises

    Uploaded by

    Rita Angela DeLeon
    The document contains multiple problems involving calculations related to investments, including interest income, amortization, fair value, gains/losses, and dividends. It includes numerical data presented across multiple years for problems involving bonds, stocks, and equity investments. Calculations are shown for topics like present value, unrealized gains/losses, and share of net income from partial ownership.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 3

    4.

    1 Multiple Choice
    1.) D
    2.) C
    3.) C
    4.) D
    5.) D

    4.2 Problem Solving


    Problem 1
    Date Fair Value Interest Received P&L Statement Gain / Loss
    01/31/2020 3,849,247.00
    12/31/2020 3,900,000.00 400,000.00 450,753.00 50,753.00
    12/31/2021 4,100,000.00 400,000.00 600,000.00 200,000.00
    12/31/2022 4,000,000.00 400,000.00 300,000.00 (100,000.00)

    Problem 2
    Date Interest Income Cash Received Amortization Amortized Cost
    01/31/2020 2,159,708.00
    12/31/2020 172,776.64 200,000.00 (27,223.36) 2,132,484.64
    12/31/2021 170,598.77 200,000.00 (29,401.23) 2,103,083.41
    12/31/2022 168,246.67 200,000.00 (31,753.33) 2,071,330.08

    Date Amortized Cost Fair Value Cumulative Balance Unrealized Gain/(Loss)


    12/31/2020 2,132,484.64 2,040,000.00 (92,484.64) (92,484.64)
    12/31/2021 2,103,083.41 1,960,000.00 (143,083.41) (50,598.77)
    12/31/2022 2,071,330.08 2,020,000.00 (51,330.08) 91,753.33

    Problem 3 Present Value of Principal 1,558,105.99


    Date Interest Income Cash Received Amortization Amortized Cost Present Value of Interest 1,235,909.15
    1/1/2020 2,794,015.14 Initial Amount 2,794,015.14
    12/31/2020 391,162.12 360,000.00 31,162.12 2,825,177.26
    12/31/2021 395,524.82 360,000.00 35,524.82 2,860,702.08
    12/31/2022 400,498.29 360,000.00 40,498.29 2,901,200.37
    12/31/2023 406,168.05 360,000.00 46,168.05 2,947,368.42
    12/31/2024 412,631.58 360,000.00 52,631.58 3,000,000.00

    Problem 4
    Year Number of Shares Rate Dividend Income
    12/31/2020 100,000.00 2.00 200,000.00
    12/31/2021 100,000.00 3.00 300,000.00
    Total 500,000.00

    Year Number of Shares Rate Amount


    1/1/2020 100,000.00 20.00 2,000,000
    12/31/2020 100,000.00 18.00 1,800,000
    12/31/2021 100,000.00 22.00 2,200,000

    Particulars 12/31/2020 12/31/2021 Remarks


    Ending 1,800,000.00 2,200,000.00 Fair Value
    Beginning 2,000,000.00 1,800,000.00 Fair Value
    Gain / Loss 200,000.00 400,000.00 Reported at P&L

    Problem 5
    Year Number of Shares Rate Amount
    12/31/2020 50,000.00 4.00 200,000.00
    12/31/2021 50,000.00 5.00 250,000.00
    Total 450,000.00

    Year Number of Shares Rate Carrying Amount


    1/1/2020 50,000.00 16.00 800,000.00
    12/31/2020 50,000.00 17.00 850,000.00
    12/31/2021 50,000.00 14.00 700,000.00

    Particulars 12/31/2020 12/31/2021 Remarks


    Ending 850,000.00 700,000.00 Fair Value
    Beginning 800,000.00 850,000.00 Fair Value
    Gain / Loss 50,000.00 150,000.00

    OCI Debit Credit Cumulative Balance


    12/31/2019 50,000.00 50,000.00
    12/31/2020 150,000.00 100,000.00

    Problem 6
    Year Net Income Ownership - 25% Share in Net Income
    12/31/2020 2,400,000.00 0.25 600,000.00
    12/31/2021 3,200,000.00 0.25 800,000.00
    Total 1,400,000.00

    Year Debit Credit Carrying Amount


    Initial Measurements 7,000,000.00 7,000,000.00
    2020 500,000.00 6,500,000.00
    12/31/2020 600,000.00 7,100,000.00
    2021 1,000,000.00 6,100,000.00
    12/31/2021 800,000.00 6,900,000.00
    8,400,000.00 6,900,000.00

    Year Number of Shares Rate Amount


    1/1/2020 500,000.00 14.00 7,000,000.00
    12/31/2020 500,000.00 15.00 7,500,000.00
    12/31/2021 500,000.00 17.00 8,500,000.00
    Year Number of Shares Rate Amount
    12/31/2020 500,000.00 1.00 500,000.00
    12/31/2021 500,000.00 2.00 1,000,000.00
    1,500,000.00

    You might also like