Title | Intermediate accounting 3 with corresponding solution and explanation |
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Author | Luxx Lawliet |
Course | Accountancy |
Institution | Saint Joseph College of Maasin |
Pages | 2 |
File Size | 75.7 KB |
File Type | |
Total Downloads | 43 |
Total Views | 471 |
13. All of the following components of OCI should be reclassified to profit or loss , EXCEPT a. Gain or loss from translating the financial statements of a foreign operation b. Gain or loss on remeasuring debt investment at fair value through other comprehensive income c. Gain or loss on derivatives...
13.
All of the following components of OCI should be reclassified to profit or loss, EXCEPT a. Gain or loss from translating the financial statements of a foreign operation b. Gain or loss on remeasuring debt investment at fair value through other comprehensive income c. Gain or loss on derivatives designated as a cash flow hedge d. Gain or loss on equity investment measured at fair value through other comprehensive income
Answer: D Explanation: Gain or loss on equity investment measured at fair value through OCI is reclassified to retained earnings 14.
The following current assets and shareholders' equity are provided by Mory Company at year-end:
Cash 600,000 Financial assets at fair value through profit or loss, including cost of P200,000 of United Company shares 1,000,000 Accounts receivable 3,500,000 Inventory 1,500,000 Total current assets 6,600,000 Share capital Share premium Retained earnings Total shareholders' equity
5,000,000 2,000,000 500,000 7,500,000
What amount should be reported as total shareholders' equity? a. 7,200,000 b. 7,300,000 c. 7,800,000 d. 5,200,000 Solution Answer B Share capital Share premium Retained earnings Treasury shares, at cost Total shareholders' equity
5,000,000 2,000,000 500,000 ( 200,000)* 7,300,000
15. Ariel Company provided the following information at year-end: Share capital 15,000,000 Share premium 5,000,000 Treasury shares, at cost 2,000,000 Actuarial loss on defined benefit plan 1,000,000 Retained earnings unappropriated 6,000,000
Retained earnings appropriated Revaluation surplus Cumulative translation adjustment-credit
3,000,000 4,000,000 1,500,000
What amount should be reported as total shareholders' equity? a. 31,500,000 b. 32,500,000 c. 28,500,000 d. 25,500,000 Solution Answer A Share capital Share premium Retained earnings unappropriated Retained earnings appropriated Revaluation surplus Cumulative translation adjustment-credit Actuarial loss on defined benefit plan Treasury shares, at cost Total shareholders' equity
15,000,000 5,000,000 6,000,000 3,000,000 4,000,000 1,500,000 * (1,000,000) ** (2,000,000) *** 31,500,000
*The credit in the cumulative translation adjustment account is a translation gain reported as component of other comprehensive income. **The actuarial loss on defined benefit plan is reported as component of other comprehensive income. If the cumulative translation adjustment account has debit balance, it is translation loss. ***The treasury shares are excluded from financial assets at fair value through profit or loss but should be reported as a deduction from shareholders' equity....