The Investments and Dividends Income accounts of Babe Time Company are shown below:

Trading Securities
Date	Description	Ref.	Debit	Credit
06/22/14	5,000 ordinary shares, par value P100, Bebe Co.	CD – 28	520,000
12/31/14	Adjustment to fair value		80,000
05/31/15	500 shares Bebe Co. received as bonus issue	GJ – 10	12,000
07/10/15	Sold 1,000 shares @ P130 net of transaction cost	CR – 21		130,000
12/04/15	Sold 1,000 shares @ P140	CR – 40		140,000

Dividend Income
Date	Description	Ref.	Debit	Credit
05/31/15	Bonus issue (stock dividend)	GJ – 10		12,000
08/01/15	Cash dividend on Bebe Co ordinary shares	CR – 22		22,500

The following information was obtained during your examination:

• The December 31, 2014 statement of financial position of Babe time Company showed, among current assets, Trading Securities of P600,000.

• You obtained the following information relating to dividends declared by Bebe Company.

Type of Dividend	Date declared	Date of record	Date of payment	Rate
Share	04/16/15	05/10/15	05/29/15	10%
Cash	06/16/15	07/16/16	07/31/15	P5 per share
Cash	12/10/15	12/28/15	01/16/16	P10 per share

• The closing market quotation is P85 as of December 31, 2015.

QUESTIONS: Based on the above date and result of the audit, compute the following:

• Gain or loss on the July 10 sale

NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)

10,009

B.

5,909

C.

20,909

D.

15,909

• Gain or loss on the December 4 sale

NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)

A.

20,000

B.

10,000

C.

20,909

D.

30,909

• Dividend revenue for the year 2015

• Unrealized gain or loss is taken to profit or loss at December 31, 2015

NOTE: Kindly input the capital letter of your choice in the blank. (e.g. A)

A.

84,318

B.

175,000

C.

62,500

D.

184,318

• Adjusted balance of the investment account at December 31, 2015?

Answer rating: 100% (QA)

Gain on Sale on the July 10 Sale Unrealized Gain or Loss Taken to Profit or Lo... View the full answer