ABC Co purchases 10,000 XYZ Inc., shares for P100 per share on April 9, 20x1. On March 31, 20x1, XYZ Inc. declares cash dividend of P8 per share to shareholders of record on April 15, 20x1. The dividends will be distributed on April 31, 20x1. The investment is measured at FVPL. Requirement: Prepare Journal Entries on April 9 and April 30, 20x1.
1. ABC Co purchases 10,000 XYZ Inc., shares for P100 per share on April 9, 20x1. On March 31, 20x1, XYZ Inc. declares cash dividend of P8 per share to shareholders of record on April 15, 20x1. The dividends will be distributed on April 31, 20x1. The investment is measured at FVPL.
Requirement:
Prepare Journal Entries on April 9 and April 30, 20x1.
2. ABC Co purchases 10,000 XYZ Inc. shares for P100 per share on April 27, 20x1. On March 31, 20x1, XYZ Inc. declares cash dividend of P8 per share to shareholders of record on April 15, 20x1. The dividends will be distributed on April 31, 20x1. The investment is measured at FVPL. Prepare Journal Entries on April 9 and April 30, 20x1.
Requirement:
Prepare Journal Entries on April 27 and April 30, 20x1.
3. ABC Co holds 10,000 shares of XYZ Inc. as Investment in equity securities. On April 1, 20x1, ABC Co receives land with accost of P1,000,000 and fair value of P1,300,000 as property dividend.
Requirement:
Prepare Journal Entries on April1.
4. ABC Co holds 10,000 shares of XYZ Inc. as Investment in equity securities. . On April 1, 20x1, ABC Co receives 10% of shares as share dividend with par value of P100 and fair value of P130. Investment is measured at FVOCI.
Requirement:
Prepare Journal Entries on April 9 and April 30, 20x1.
5. ABC Co holds 10,000 shares of XYZ Inc. as Investment in equity securities. . On April 1, 20x1, ABC Co receives 10% of shares as share dividend with par value of P100 and fair value of P130. Investment is measured at amortised cost.
Requirement:
Prepare Journal Entries on April1.
6. ABC Co is an investor in XYZ. On August 1, 2ox1, XYZ Inc declared 20% share dividends to shareholders of record as of September 1, 20x1. The date of distribution is October 1, 20x1.
Investments measure at Amortised Cost
Date of Acquisition No. of Shares Cost
1. March 3, 20x0 20,000 400,000
2. June 1, 20x1 15,000 270,000
On October 15, ABC Co sold 75% of the share dividends received for P18 per share.
Requirement:
Compute for gain or loss on sale using FIFO method and prepare
7. ABC Co holds 20,000 shares of XYZ Inc as investment in equity security measured at cost. The investment has carrying amount of P500,000. On April 1, 20x1, ABC Co receives 97,000 cash in lieu of 5,000 share dividends.
Requirement:
Prepare Journal Entries on April1
8. . ABC Co holds 20,000 shares of XYZ Inc as investment in equity security measured at FVOCI. The investment has carrying amount of P500,000. On October 1, 20x1, ABC Co receives 20,000 stock rights to subscribe for new shares @ P10 per share for every 5 rights held. The fair value per stock right if P5.
On November 2, 20x1 15,000 stock rights were sold @ 4 per right.
On December 1, 20x1 remaining stock rights have expired.
Requirement:
Prepare Journal Entries on October 1, November 2 and December 1, 20x1.
ABC Co holds 20,000 shares of XYZ Inc as investment in equity security measured at Cost. The investment has carrying amount of P500,000. On October 1, 20x1, ABC Co receives 20,000 stock rights to subscribe for new shares @ P10 per share for every 5 rights held. The fair value per stock right if P5.
On November 2, 20x1 15,000 stock rights were sold @ 4 per right.
On December 1, 20x1 remaining stock rights have expired.
Requirement:
Prepare Journal Entries on October 1, November 2 and December 1, 20x1.
10. On June 1, 20x1, ABC Co acquired investment in bonds with detachable warrants for P1,950,000. The bonds have face amount of P2,000,000. Without the detachable warrants, the bonds are selling at P1,800,000. The warrants have fair value of P150,000. ABC Co business model requires debts instruments to be measured at FVOCI and Equity instruments at fair value. Subsequently, warrants were sold for P120,000.
Requirement:
Prepare Journal Entries on June 1 and selling of warrants.
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