question archive The following information was extracted from the December 31, 2010 statement of financial position of Gil Company: Noncurrent assets: Financial asset at fair value 3, 700,000 Shareholder’s equity: Unrealized loss on financial asset (300,000) Gil Company paid transaction on of P100, 000 related to the acquisition of the investment
The following information was extracted from the December 31, 2010 statement of financial position of Gil Company: Noncurrent assets: Financial asset at fair value 3, 700,000 Shareholder’s equity: Unrealized loss on financial asset (300,000) Gil Company paid transaction on of P100, 000 related to the acquisition of the investment
Subject:FinancePrice:2.87 Bought7
The following information was extracted from the December 31, 2010 statement of financial position of Gil Company:
Noncurrent assets:
Financial asset at fair value 3, 700,000
Shareholder’s equity:
Unrealized loss on financial asset (300,000)
Gil Company paid transaction on of P100, 000 related to the acquisition of the investment. This amount is capitalized part of the cost of the investment.
The entity elected to measure the financial asset at fair value through other comprehensive income.
What was the historical cost of financial asset?
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a. 3, 700,000 b. 3, 400,000 c. 3, 900,000 d. 4, 000,000 |
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Answer d |
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Fair value- December 31, 2010 |
3, 700,000 |
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Add back: Unrealized loss |
300, 000 |
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Historical cost |
4, 000,000 |
The transaction of P100, 000 is properly capitalized as cost of the financial asset measured at fair value through other comprehensive income.
