AUDIT OF INVESTMENTS
Your audit of the Figaro Corporation disclosed that the company owned the following securities on December 31,
2023:
Trading securities (FA-FVPL):
Security Shares Cost Market
Sputnik, Inc. 4,800 P72,000 P92,000
Explorer, Inc. 8,000 216,000 144,000
10%, P100,000 face value, Vanguard
bonds (interest payable semiannually 79,200 81,720
on Jan. 1 and July 1)
Total P367,200 P317,720
Available-for-sale securities (FA-FVOCI):
Security Shares Cost Market
Score Products 16,000 P688,000 P720,000
Tiros, Inc. 120,000 3,120,000 2,920,000
Midas, Inc. 40,000 480,000 640,000
Total P4,288,000 P4,280,000
Held to Maturity (FA-FVAC):
Cost Book Value, 12/31/2023
12%, P1,000,000 face value, 5-year Discoverer
bonds (interest payable annually every Dec.31) P950,000 P957,680
During 2024, the following transactions occurred:
Jan.1 Receive interest on the Vanguard bonds.
Mar. 1 Sold 4,000 shares of Explorer Inc. stock for P76,000.
May 15 Sold 1,600 shares of Midas, Inc. for P15 per share.
July 1 Received interest on the Vanguard bonds.
Dec. 31 Received interest on the Discoverer bonds.
Dec. 31 Transferred the Discoverer bonds to the available-for-sale portfolio. The bonds
were selling at 101 on this date. The
bonds were purchased on January 2, 2023. The discount was amortized using
the effective interest method.
The market value of the stocks and bonds on December 31, 2024, are as follows:
Sputnik, Inc. P22 per share
Explorer, Inc. P15 per share
10% Vanguard Bonds P75,600
Score Products P42 per share
Tiros, Inc. P28 per share
Midas, Inc. P18 per share
REQUIRED:
Based on the above and the result of your audit, determine the following:
1. Gain or loss on sale of 4,000 Explorer, Inc. shares on March 1, 2024:
2. Realized gain or loss on sale of 1,600 Midas, Inc. shares on May 15, 2024:
3. Total interest income for the year 2024:
4. The amount that should be reported as unrealized gain in the statement of changes in equity regarding transfer of
Discoverer bonds to AFS or (FVOCI):
5. Carrying value of Trading Securities (FA-FVPL) and Available-for-sale securities (FA-FVOCI) as of December
31, 2024 should be:
