1. On January 1, 2021, Atty. Vincenzo purchased 30,000 shares of Babel Group’s 200,000 outstanding ordinary shares for P6,000,000. On the day of the purchase, the carrying amount of the 30,000 shares Vincenzo purchased was P4,500,000.

During 2021, Vincenzo gained 2 of 10 seats on Babel Group’s Board of Directors.

Babel Group reported a P5,200,000 net income in 2021 and paid P2,500,000 dividends at year-end.

How much is Vincenzo’s investment income for 2021?

Group of answer choices

P1,155,000

P675,000

P375,000

P780,000

What is the carrying amount of Kia’s investment in Babel Group as of December 31, 2021?

Group of answer choices

P7,700,000

P4,500,000

P6,000,000

P6,405,000

2.  On January 1, 2020, Hannah’s Publishing (Hannah) acquired Dani-HIIT Co.’s (Dani) P3,500,000, 5-year 10% bond for P3,309,661.31. The ongoing interest rate for Dani’s bonds at that time was 11% To successfully purchase Dani’s bonds, Hannah incurred a transaction cost of P150,000 (on top of the purchase price).

Hannah classifies Dani’s bond as a financial asset at fair value through other comprehensive income. The fair value of the bonds at the end of each year is as follows:

December 31, 2020	105
December 31, 2021	103
December 31, 2022	97

What is the carrying amount of Dani’s bond on December 31, 2021?                      

Group of answer choices

P3,309,661

P3,605,000

P3,459,661

P3,490,244