Supporting records of ABC CORP's trading securities portfolio show the following debt and equity securities: Security Cost Fair Value 400 ordinary shares Con Co

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Supporting records of ABC CORP's trading securities portfolio show the following debt and equity securities:

Security Cost Fair Value

400 ordinary shares Con Co. P254,500 P243,000

P800,000 Tip Co. 7% bonds 796,500 774,000

P1,200,000 Turk Co. 7½ bonds 1,207,500 1,218,900

Totals P2,258,500. P2,235,900

 

Interest dates on the bonds are January 1 and July 1. ABC Corp uses the income approach to record the purchase of bonds with accrued interest. During 2017 and 2018, ABC completed the following transactions related to trading securities:

 

2017

Jan 1 Received semiannual interest on bonds. Assume that the appropriate adjusting            entry was made on December 31, 2016

April 1 Sold P600,000 of 7½ Turk bonds at 102 plus accrued interest

May 21 Received dividend of P1.25 per share on the Con ordinary share capital The dividend had not been recorded on the declaration date.

Jul 1 Received semiannual interest on bonds and then sold the 7% Tip bonds at 97 ½

Aug 25 Purchased 200 shares of New Inc. ordinary share capital at P580 per share plus brokerage fees of P500.

Nov 1 Purchased P500,000 of 8% Tol Co. bonds at 101 plus accrued interest. Brokerage fees were P1,250. Interest dates are January 1 and July 1. 

Dec. 31 Market price of securities were:

Con ordinary shares P550

7½ Turk bonds 101¾ 

8% Tol bonds 101

New ordinary shares P583.75

 

2018

Jan 2 Recorded the receipt of semiannual interest on bonds 

Feb 1 Sold the remaining 7½ Turk bonds at 101 plus accrued interest.

 

1. What amount should be reported as gain on sale of trading securities in 2017?

 

Answer not given

P6,000

P2,550

P8,550

P3,450

 

2. What is the loss on the sale of the remaining Turk bonds on February 1, 2018?

P4,500

P10,500

Answer not given

P750

P13,500

 

3. What amount of unrealized gain or loss should be reported in the income statement for the year ended December 31, 2017?

P6,150 unrealized gain

P6,150 unrealized loss

Answer not given

P21,200 unrealized gain

P21,200 unrealized loss