1 Selling price of Security A

Less: Carrying Amount

Gain on sale in P/L

1,900,000
1,200,000
700,000 B

Note that transaction cost of 700k is an expense and 200,000 of unrealized loss was recognized in 2016.
2 Under PFRS 9, gain on disposal is recognized in OCI for FVOCI
Selling price of Security C
Less: Carrying Amount
Gain on CA
Reclassification adjustment of UG
Total gain in P/L

D
5,200,000
4,700,000
500,000
300,000
800,000 A

3 Under PFRS 9, all gains and losses including nontemporary losses and disposal gains and losses are reported in OCI
Answer for number 1 is 3,500,000 in OCI or "Letter C"
Under PAS 39, the 3.5M is reported as "impairment Loss"
4 Cash dividend
Cash in lieu of stock dividend
Total dividend income
5 Property dividend (100,000 / 4 ) x P10
6 Cost of stock rights (50,000 x 10)
Exercise price (10,000 x 140)
Cost of new shares acquired
7 Theoretical value of stock rights
Cost of stock rights (50,000 x 5)
Exercise price (12,500 x 100)
Cost of new shares acquired

D
1,500,000
750,000
2,250,000 B
250,000 D
500,000
1,400,000
1,900,000 B
5
250,000
1,250,000
1,500,000 A

nized in 2016.

losses are reported in OCI

1 Cost on 7/1/16
Share in 2016 net income (6M x 20% x 6/12)
Amortization of identifiable intangible asset (1M / 5 x 6/12)
Cash dividends received (1M x 20%)
Carrying amount 12/31/16

5,000,000
600,000
(100,000)
(200,000)
5,300,000 C

2 Share in net income (8M x 40%)

Deferred profit from inventory (5M - 3M) x 40%
Deferred gain on sale from equipment (4M - 2.5M) x 40%
Realized gain from depreciation ((4M - 2.5M) / 5) x 40%
Investment income

3,200,000
(800,000)
(600,000)
120,000
1,920,000 A

3 Net income
Less: Dividends on preference shares
Net income to ordinary shareholders
Multiply by
Investment income

8,000,000
(500,000)
7,500,000
0
3,000,000 B

4 Cost of the investment

Less: BV of investment acquired (10M x 40%)
Difference of cost over BV
Allocation:
Equipment (2M x 40%)
Inventory (1.5M x 40%)
Gain on bargain purchase

5,000,000
4,000,000
1,000,000

Share in net income (8M x 40%)

Amortization of equipment (800,000 / 4)
Amortization of inventory
Gain on bargain purchase
Investment income
5 Dividend or Investment income in 2016 (1M x 10%)

-800,000
-600,000

(1,400,000)
(400,000)
3,200,000
(200,000)
(600,000)
400,000
2,800,000 C
100,000 B

FV of 10% interest
2017 Acquisition cost
Total purchase price

3,500,000
8,500,000
12,000,000

Less: FV of NA acquired (36M + 4M) x 25%

GW

10,000,000
2,000,000

Gain on remeasurement to FV of 10% interest

Net Investment Income (2M - (4M x 25% / 4 years)
Total 2017 income
1/1 CA
Inv. Income
Dividends
12/31 CA

500,000
1,800,000
2,300,000
12,000,000
1,800,000
(1,250,000)
12,550,000 A

6 Cost of 30% investment

Share in 2016 net income
Dividends received
Carrying amount December 31, 2016
Share in 2017 6 mos.NI
CA on 7/1/17

2,000,000
240,000
(150,000)
2,090,000
300,000
2,390,000 A

Selling price
Carrying amount of retained investment (2.39M x 50%)
Total
Less: Total carrying amount at date of sale
Gain on sale

1,500,000
1,195,000
2,695,000
2,390,000
305,000 B

FV on 7/1 of retained investment

Less: CA of retained investment
Gain from remeasurement
2017 Investment income
Gain on sale
Dividend Income

1,600,000
1,195,000
405,000
300,000
305,000
150,000

Unrealized gain on trading securities

Total Income

200,000
1,360,000 N/A

1 2016 Effective interest income

Less: Nominal interest
Amortization
1/1 CA
12/31/16 CA
2017 Interest Income
Less: Nominal interest
Amortization
1/1 CA
12/31/16 CA
2 Cost
Add: December 31 discount amortization
CA 12/31/16
3 Cost
Discount amortization
FV due
CA 12/31/16
4 Cost
Less:December 31 Premium amortization
CA 12/31/16

5 Unrealized gain in P/L (5.75M - 5.4M)

Nominal interest income

375,600 D
360,000
15,600
3,756,000
3,771,600
377,160 D
360,000
17,160
3,771,600
3,788,760 D
906,000
5,300
911,300 A
7,679,000
121,480
-2,000,000
5,800,480 D
1,198,000
2,080
1,195,920 C

350,000 C
600,000 A

Carrying amount FV of investment

5,750,000 A

6 Cost
2016 Discount amortization
2016 Unrealized gain (SQUEEZE)
FV on 12/31/16
2013 Discount amortization
2013 Unrealized gain (SQUEEZE)
FV on 12/31/17

4,742,000
79,360
428,640
5,250,000
85,709
164,291
5,500,000 C

Cumulative UG in OCI

592,931 B

2017 Interest income (300K + 85,709)

385,709 C

3 Cost
1,198,000
Less:December 31 Pre
1,560
CA 12/31/16
1,196,440

1 Interest rate swap receivable

Net interest (600 - 100)
2 Interest rate swap payable 2016
Interest rate swap payable 2017
Interest expense (300 + 200)
3 Forward contract receivable
4 Call option receivable
Cash settlement (15 x 50k)
Net purchases (5.75M - 700k)
Loss on call option (unexercised)
Liability

89,000 A
500,000 B
-534,000 D
-178,000 B
500,000 A
250,000 C
500,000
750,000
5,050,000
50,000
None

A
A
C
C
D

1 Investment property

9,000,000

Ppe
2 Selling price
Less: CA
Cost
Less: AD (2.2M / 40 x 3)
Gain on sale

6,000,000
2,900,000
2,200,000
165,000

3 FV on 12/31/12
Less: FV on 12/31/11
Loss on FV adjustment

9,700,000
10,100,000
-400,000

4 Annual deposit (20M / 4.78)

4,184,100

5 Premium Paid
Increase in CSV
Dividends on Insurance Policy (received)
Net Life Insurance Expense

100,000
-10,000
-5,000
85,000

6 Cash surrender value on 12/31/15

Adjustment of CSV on 10/31/16 (95T - 75T) x 9/12
Total
Proceeds from life insurance
Less: Adjusted CSV
Unused Life insurance payment (160,000 x 3/12)
Gain from life insurance
Life insurance expense

2,035,000
865,000

75,000
15,000
90,000
2,000,000
90,000
40,000

130,000
1,870,000
105,000

D
C

B
B

B
D