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WorksheetsIntAcc1.3 - Investments in Debt and Equity Securities
Total questions: 13
Worksheet time: 11mins
Under IFRS 9, which of the following is not a category of financial assets?
Financial assets at fair value through profit or loss
Financial assets at fair value through other comprehensive income
Financial assets at amortized cost
Financial assets held for sale
Transaction costs that are directly attributable to the acquisition of a financial asset shall be
Capitalized as cost of the financial asset
Expensed when incurred
Charged to retained earnings
Included as a component of other comprehensive income
Depending on the business model for managing financial assets, an entity shall classify financial assets subsequent to initial recognition at
Fair value
Amortized cost
Either fair value or amortized cost
Neither fair value nor amortized cost
The contractual agreement between the investor and the bond issuer is contained in the formal document known as
Contract of debt
Bond indenture
Bond certificate
Bond agreement
The interest rate written on the face of the bond is known as
Effective rate
Coupon rate
Yield rate
Market rate
The effective interest rate on bonds is lower than the stated rate when bonds sell
At maturity value
Above face value
Below face value
At face value
An investor purchased a bond classified as a long-term investment between interest dates at a premium. At the purchase date, the carrying amount of the bond is more than the
Cash paid to seller
Face value of bond
Both a and b
Neither a nor b
Raiser Company acquired a financial asset at its market value of ₱3,200,000. Broker fees of ₱200,000 were incurred in relation to the purchase. At what amount should the financial asset initially be recognized respectively if it classified as at fair value through profit or loss, or as at fair value through OCI?
₱3,400,000 and ₱3,200,000
₱3,200,000 and ₱3,200,000
₱3,200,000 and ₱3,400,000
₱3,400,000 and ₱3,400,000
Carmela Company acquired a financial instrument for ₱4,000,000 on March 31, 2018. The financial instrument is classified as financial asset through other comprehensive income. The direct acquisition costs incurred amounted to ₱700,000. On December 31, 2018, the fair value of the instrument was ₱5,500,000 and the transaction costs that would be incurred on the sale of the investment are estimated at ₱600,000.
What gain would be recognized in other comprehensive income for the year ended December 31, 2018?
₱200,000
₱900,000
₱800,000
₱0
Axim Co. acquired 40,000 ordinary shares on October 1 for ₱6,600,000 to be held for trading. On November 30, the investee distributed 10% ordinary share dividend when the market price of the share was ₱250. On December 31, the entity sold 4,000 shares for P1,000,000.
What amount should be reported as gain on sale of investment in the current year?
₱340,000
₱400,000
₱500,000
₱600,000
On January 1, 2020, Mir Co. acquired ₱4,000,000 of 12% face amount of bonds for ₱3,767,000 to be held as financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2023. The effective interest method of amortization is used.
What is the carrying amount of the bond investment on December 31, 2021?
₱3,814,380
₱3,767,000
4,000,000
3,719,620
On January 1, 2021, Par Co. purchased 9% bonds with a face amount of ₱4,000,000 for ₱3,756,000 to yield 10%. The bonds are dated January 1, 2021, mature on December 31, 2030, and pay interest annually on December 31. The bonds are measured at amortized cost.
What amount should be reported as interest revenue for 2021?
₱400,000
₱344.400
₱360,000
375,600
On July 1, 2021, Vic Co. purchased ₱1,000,000 of 8% bonds for ₱946,000, including accrued interest. The bonds mature on January 1, 2027, and pay interest annually on January 1. The bonds are measured at amortized cost.
On December 31, 2021, what is the carrying amount of the bond investment?
₱911,300
₱916,300
₱953,300
₱960600
