In June 2022, Wild Company had excess cash that would not be needed until March 1, 2022. Management decided to invest the money in a short-term investment in FVTPL financial assets. Wild owned no investment financial assets before June 2022. The following transactions relate to these investments: June 20 Purchase 10,000 shares of West Corporation stock. The price paid was P104,500. September 2 Received a cash dividend of P1.20 per share on West stock. October 5 Sold 4,000 shares of West stock at P10.00 per share. Paid a selling commission of P400. December 31 The market price of West stock was P11.00. Required: Compute the realized gain or loss on October 5, 2022. Compute the amount of unrealized gain or loss that will be reported to income statement for 2022. Assume that the fair value of the investment on December 31, 2023 is P14/share. Compute the amount of unrealized gain or loss that will be reported to income statement for 2023.
. In June 2022, Wild Company had excess cash that would not be needed until March 1, 2022. Management decided to invest the money in a short-term investment in FVTPL financial assets. Wild owned no investment financial assets before June 2022. The following transactions relate to these investments:
June 20 Purchase 10,000 shares of West Corporation stock. The price paid was P104,500.
September 2 Received a cash dividend of P1.20 per share on West stock.
October 5 Sold 4,000 shares of West stock at P10.00 per share. Paid a selling commission of P400.
December 31 The market price of West stock was P11.00.
Required:
Compute the realized gain or loss on October 5, 2022.
Compute the amount of unrealized gain or loss that will be reported to income statement for 2022.
Assume that the fair value of the investment on December 31, 2023 is P14/share. Compute the amount of unrealized gain or loss that will be reported to income statement for 2023.
Step by step
Solved in 2 steps
