Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. for the year ended december 31, 2019, wqa company

For the year ended December 31, 2019, WQA Company reported opening retained earnings of P1,850,000...

80.2K

Verified Solution

Question

Accounting

image

For the year ended December 31, 2019, WQA Company reported opening retained earnings of P1,850,000 and cumulative unrealized gains recorded as reserves of P25,000. These gains are from an investment with an original cost of P100,000 and a fair value of P125,000. The company policy is to value all investments at fair value with unrealized gains and losses included in reserves. The company's accounting policy is that when an investment is sold, the reserve amount is transferred to retained earnings. During 2020, one-half of the investment was sold. The remaining investment increased in value to P70,000. A second investment was bought for P150,000 and its fair value had increased to P165,000 by the end of 2020. What is the reserve balance at December 31, 2020? a. P27,500 c. P45,000 b. P35,000 d. P60,000

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students