(FROM FVOCI TO FVPL)

Required:

An audit working paper for 2021 showing computations for

(a) the interest income

(b) carrying amount of the investment

(c) net unrealized gain (loss) in P&L

(d) cumulative net unrealized gain (loss) in shareholders’ equity
 

Transcribed Image Text:

The following information pertaining to a 5-year P4,000,000 debt investment with a stated rate of 12% was taken from the records of Eggplant Company: Date Amortized Fair value Market cost P4,303,263 P4,303,263 4,253,589 4,198,948 rates January 1, 2020 December 31, 2020 December 31, 2021 10% 4,388,766 4,097,749 9% 11% On January 1, 2021, the investment was reclassified under various classifications (refer to the requirements below). Assume that the fair value on the date of reclassification was the same as the fair value on December 31, 2020. The following information pertaining to a 5-year P4,000,000 debt investment with a stated rate of 12% was taken from the records of Eggplant Company: Date Amortized Fair value Market cost P4,303,263 P4,303,263 4,253,589 4,198,948 rates January 1, 2020 December 31, 2020 December 31, 2021 10% 4,388,766 4,097,749 9% 11% On January 1, 2021, the investment was reclassified under various classifications (refer to the requirements below). Assume that the fair value on the date of reclassification was the same as the fair value on December 31, 2020.

Answer rating: 100% (QA)

DATE PARTICULARS DEBIT CREDIT 112020 FA at FVOCI 303263 To interest income 30326... View the full answer