Reference no: EM132885172

Question - A. On December 1, 2019, S Corporation declared property dividend in the form of equity securities held by S Corporation as EI at FVPL distributable on January 6, 2020. Equity securities has a carrying amount of P300,000 on December 1, 2019 while its fair value on the same date is P325,000. However, the equity securities' fair value on December 31, 2019 (reporting date) and January 6, 2020(date of settlement) are P360,000 and P350,000, respectively.

Q1. By how much would retained earnings decreased as a result of the foregoing?

Q2. How much is the gain or (loss) on disposal of an asset to be recognized on January 6, 2020 or at the date of settlement? Indicate whether gain or (loss).

B. On October 1, 2020, the board of directors of X Corporation declared property dividends distributable on March 31, 2021 in the form of equipment with a carrying amount of P300,000 (cost of which is P450,000) and with updated accumulated depreciation of P150,000 while the fair value is P350,000. The asset's fair value at December 31, 2020 is P365,000 while on March 31, 2021, P360,000.

Q3. By how much would retained earnings decreased as a result of the foregoing?

Q4. How much is the gain or (loss) on disposal of equipment to be recognized on March 31, 2021 or at the date of settlement? Indicate whether gain or (loss).