Santol Corp. invested its excess cash by purchasing non-trading equity securities on January 1, 2014. The following
are the equity securities purchased by Santol Corp. on January 1, 2014:
Investee Company
Shares
Fair value
Transaction Cost
Kelly, Inc.
30,000
400,000
50,000
Eloy Corp.
60,000
1,400,000
100,000
Yogi Enterprise
60,000
2,100,000
60,000
Totals
3,900,000
210,000
On initial recognition, the entity made an irrevocable election to present its securities at fair value through other
comprehensive income. As of December 31, 2014, the company’s securities portfolio consisted of the following:
Investee Company
Shares
Cost
Fair Value
Kelly, Inc.
30,000
450,000
425,000
Eloy Corp.
60,000
1,500,000
1,610,000
Yogi Enterprise
60,000
2,160,000
2,300,000
Totals
4,110,000
4,335,000
During the year 2015, Santol sold 60,000 shares of Eloy Corp. for 1,600,000 and purchased 60,000 additional shares of
Kelly, Inc. and 30,000 shares of Kongga Company.
On December 31, 2015, Santol’s portfolio of non-trading equity securities comprised of the following:
Investee Company
Shares
Cost
Fair Value
Kelly, Inc.
30,000
450,000
500,000
Kelly, Inc.
60,000
1,300,000
1,450,000
Kongga Company
30,000
520,000
480,000
Yogi Enterprise
60,000
2,160,000
700,000
Totals
4,430,000
3,130,000
During 2016, Santol sold all the Kelly, Inc. shares for 2,300,000 and 15,000 shares of Kongga Company at a loss of
90,000.
On December 31, 2016, Santol’s portfolio of non-trading equity securities comprised of the following:
Investee Company
Shares
Cost
Fair Value
Kongga Company
15,000
260,000
180,000
Yogi Enterprise
60,000
2,160,000
4,200,000
Totals
2,420,000
4,380,000
Question 1: On January 1, 2014, what is the initial measurement of the equity securities?
a. 3,900,000
b. 4,335,000
c. 4,110,000
d. 3,130,000
Question 2: On December 31, 2014, what amount should be reported as
Non-Trading Securities
Unrealized gain (loss) – OCI
a.
4,335,000
225,000
b.
4,110,000
210,000
c.
4,335,000
435,000
d.
3,900,000
0
Question 3: What should be reported on Santol’s statement of financial position as of December 31,2016?
Non-Trading Securities Unrealized gain on Non-Trading Securities
a.
4,380,000
1,960,000
b.
2,420,000
0
c.
4,380,000
0
d.
2,340,000
2,090,000
Question 4: What is the realized gain or loss on the sale of Eloy Corp. shares in 2015?
a. 10,000 loss
b. 100,000 gain
c. 120,000 loss
d. 90,000 gain
Question 5: What is the net realized gain on the sale of securities in 2016?
a. 550,000
b. 350,000
c. 460,000
d. 260,000