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Auditing Problem IITENEO/ESPENTLIA

Quizzer 6 Solution Guide

66. Ac. A.
Share from rc-t income (p2.5M*3ar./o) 750,000
UndeEtatemmt in Depr: (360,C0,. ,yr) t72.000)
Invstmqt iImre - p&L f 6?8861
67. Are. D-
Inv6tment income - P&t 67g,000
Share jrom Unrealized tnlding lms - O:L (p50OK*3Oo/o) (1SO,OOO)
I{et amount to be reportcd in th.; SCI f..Eo61
68./\6. lt.
Acquisition.ost 6,000.000
Share frc,m dividsds (p8O0,O0OJ3C%) (240,000)
Share from n€t inconte 678,000
Share fronr OCL (P500,000*30o/o) (150-000)
Carrying yalw, ,.2/ 3!/ 14 l-6zffi-l
69, AN. B.
Bdore Dil. After Dil. Decrue
Number of shars owred 300.000
Total outsrarding shares

_3bm
Share frcr, the increde in lvhite'-c cpiial as a r6ult of share ise:
00, *P3
(2 0 )' 25 o,'o
00s h 0
1,500,000
CV of inv€tment dsmecl sclJ:
(P 6,22 8,
0O A* Gqo B 0o/o)) (1.048.000)
Dilution oain before Hycling of G_L 452,000
Rrycling of CCL (P150,000*( so./o/j 0olo) )

70. AG.
Afiustd dilution
B-
gain (True Sale)
f=zE r25.000 )

Share from the incms in rl/hite,s ,_apiial as a rsult of share rs$e:

(200,000sh*P30)*25o,'o 1,5OO,OOO
CV of investment, excluding good!\ il ciemed sold:
(P6/228,000-P600,000)*(5c,i,/,rrl9/o)
{948,000)
Dilubon qain before recyclinq of o L_ 552,000
Rsycling of OCL (P150,000* (5o/o tt, O9o ))
Adjusted dalution qain

71. AB. C.
Before Css. After C6s.
Number of shares owred 300,000 180.000
Total outstanding shaB 1,000,000 1_000_000
30 o/o
18o/o

Realized Unrealized Total

Proceeds frcm poriton sold (120,0,:rCslE16*p3O) 3,600.000 , 3,600,000
FMV of remainirE portion to be ra,:isified to FA at FMV
5,400,000 5,400,000
Ls: CV of grrtion sold (D6,229,0.;X*12O//3OO) (2,s15,200) (2,s1s,200)
CV of portion Htassified (p6,t28,000*1gO/300) (3.772,8001 (3.772.5OO\
C6sation g€in/16 hrefde isyciinil ef -..
1,084,800
Recycling of OCL:
alCI,/L 7,627,200 2,7t2,@O
Portion sold (P150,000*120/:0C) (60,000) (60,000)
Portion re.lassified (p1 50,OOil * 1 8O/,300)
Adjsuted ce*tion gain

72. Ans. A.

C6e 1: "Cost-Bascd Appffih, witir CitcF-up Adjustffit,,:

73. Ans. D-
Sfrare from Net inmme, Jan i-o lun, i.015 (p30O,OO0'1Oo/o)
Share from Net lrcome, Aug to De, . ZC15 (p200,000*4oqo)
Sharc from Nd Incom in 2ols
74. Ans. A.
January 1, 2014 Cct (10%) 700,000
' Share from NIet Ircome, 2014 (P.10i,,00C*1Co/o) 40,000
share f..om Dividends, Oct. 1" 2014 ( 10,000*pO.9O)
Carrying value, 1,2/31174 had equi.:y m€thod been ued
_-_l10ogt
731,O00
Share from Flet inmme. Jan to lun, 2015 (p300,000*1oo/o) 30,000
Share from Dividends, Apr. 1, 2015 lt C,0O0*p1.10) (1 1,000)
Additional invstment, luly 1,2015 (30o/o) 2,400,000
Share from Dividencrs, Oct. 1, 201.5 i4O,OO0*p1.35) (54,000)
Share frorn Net lrcome, Aug io D€c, 2015 (p2OO,OOO.4Oolo) 80.000
Carrying valre, 12l31./2(,15 3,176,()(]'()

Ca* 2: "Cct-Baxd Appreilh, withoul Cltclr.up Adjustmnt,,:

75. Ac- c. jl I
Dividends Income, April 1, 2015 ( t tl,000*p1.10)
Share from l.let lrcome, Aug to De' 2C15 (P200,000*409o) ri
Sharc lrom N€t l[colrc if, 2()15

76. Ac. B.
lanuary 1, 2014 Original Cost (10qt) 700,000
Additicnal invEtment, July 1, 201:, i30%l 2,400,000
Share from Dividends. Oct. 1, 2015 (4J,000*P1.35) (s4,000)
Share from l.let lrcome, Aug to De(., 2015 (P20O,OO0*409o) _!_q,aq0
C.arrying valre, 12l31/2O1.5 3.126.fiX)

CasG 3: ""Fair tllrkct Valuc Approach. without Catch-up Adjuctrrcnt" I

77. Ans. C.
Dividends Income, April 1, 2015 (iC,Ool]*P1.10) 1 1,000
Share from l.let Ineome, Aug to Ds. 2C15 (P200,000*409o)
Inorc
___ 80.000 i
Sharc frcm NGc in 2015 I elooo I
I'il
i,

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