Haste Company another entity. Number of shares Cost 20,000 40,000 In 2020, the entity received 60,000 rights to purchase one 2018 2019 2,000,000 3,500,000 share at P80. Five rights are required to purchase the share. At issue date, rights had a market value of P5 each. The entity used rights to purchase 10,000 additional shares

Haste Company another entity. Number of shares Cost 20,000 40,000 In 2020, the entity received 60,000 rights to purchase one 2018 2019 2,000,000 3,500,000 share at P80. Five rights are required to purchase the share. At issue date, rights had a market value of P5 each. The entity used rights to purchase 10,000 additional shares

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 28E

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12. On January 1.2020. Animosity Compony purchased 50000 shares of another enfify for P3,800,000. On October 1,2020, frie enfify ieceived 50,000 stock rghts Trom the investee. Each right entities the holder to acquire one share for P80. he market price of investee's stiares wos Pi00 mmediafely before fhe rights were- 15Sued and P90 immediotely ofter the rights were issued. On December 1.2020. ihe entity exercised aff stock rights. On Decembe 31,2020, the antity sold 25,000 shares at P90per share. The stock rights are not accounted for separately. If the FIFO approach is used.whatis the gain on sale of investment that should be recognized in 20207 a. 350.000 b. 300,000
Question: The total amount reported in 2019 profit or loss is? On January 1, 2019, an entity purchased 15,000 shares of another entity representing a 12% interest for P2,500,000. The entity elected to measure the investment at FVOCI. The investee reported net income of P3,000,000 and paid dividends of P15 per share in 2019. The fair value of the investment was P2.800.000 on December 31, 2019. On January 1, 2020, the entity paid P3,000,000 for 16.250 additional shares of the investee. The fair value of the 12% interest did not change on this date. The fair values of the identifiable net assets of the investee equal carrying amount of P15,000,000 on such date except for land whose fair value exceeded carrying amount by P3,000,000. For the year ended December 31, 2020, the investee reported net income of P6,000,000 and paid dividends of P20 per share.
(A) For letters a to d, identify how much to add or deduct from the Investment in Associate account of ABC based on the following transactions or events: a. Dec. 1, 2020 - Bought 3,000 X Corp. shares at P200 per share. The total ordinary shares outstanding of X is 100,000 and each had a par value of P150. b. Jan. 1, 2021 - Bought an additional 15,000 shares of X Corp. for a total price of P3,800,000. The original shares are valued at P250 each. On the same date, ABC started providing essential technical information to X and that both corporations have an interchange of managerial personnel. Significant influence is established. There were no changes in the ordinary shares outstanding. c. Net income reported for the year by the associate was P2,500,000. Adjust net income with data from letter d. d. Dividends declared by X are P2,000,000. It has 90,000 6%, P100-par value preference shares outstanding which are cumulative and participating. No dividends were declared in the previous…
1. On January 3, 2020, Castle Corporation purchased the following equity securities as an investment: Number of Cost of Total Company Shares Share $20 Cost $ 8,000 24,000 600 ,7ב 400 2,000 800 B 12 22 These securities are classified as available for sale. Required: a. Prepare the journal entry to record the acquisition of the stock. b. On June 30, 2020, C Company paid dividends of $3.00 per share. Prepare the journal entry that would be used by Castle to record the dividend receipt. c. On December 31, 2020, the market values per share were: Company Market Value A $22 B 12 20 Prepare any journal entry or entries necessary to record these changes in market value. d. On March 14, 2021, Castle sold 800 shares of C Company for $18 per share. Prepare the journal entry to record the sale.
Question: The carrying amount of the investment on December 31, 2020? On January 1, 2019, an entity purchased 15,000 shares of another entity representing a 12% interest for P2,500,000. The entity elected to measure the investment at FVOCI. The investee reported net income of P3,000,000 and paid dividends of P15 per share in 2019. The fair value of the investment was P2.800.000 on December 31, 2019. On January 1, 2020, the entity paid P3,000,000 for 16.250 additional shares of the investee. The fair value of the 12% interest did not change on this date. The fair values of the identifiable net assets of the investee equal carrying amount of P15,000,000 on such date except for land whose fair value exceeded carrying amount by P3,000,000. For the year ended December 31, 2020, the investee reported net income of P6,000,000 and paid dividends of P20 per share.
SUKON Company acquired equity securities at the beginning of 2020. SUKON Company provided you the following information: Security. No. of shares Acquisition Cost AKO Co. shares 100,000 shares P5,250,000 AKO shares were acquired and were designated as financial asset at fair value through OCI. The shares were acquired at P52.50 per share which included a P2.50 per share transaction cost. Half of the AKO shares were sold at P58 per share on July 1, 2021. Fair value, Fair value, Dec. 31, 2020 Dec. 31, 2021 P55/share P62/share How much is the carrying value of the Investment on December 31, 2021? O 2,900,000 O 2,500,000 O 3,100,000 O 2,750,000
6. ABC Corp holds 1,000 shares of XYZ Corp.'s shares since 2019. The following are data available at Dec 1, 2020: Cost per share P3.00 Transaction cost per share (upon acquisition) P1 Most recent transaction price per share P2 Transaction cost per share (current) P.50 If ABC classified these shares as investment in stocks-FVOCI, how much is the adjustment for the change in fair value? FVPL 2,000 FVOCI 1,000 FVOCI 1,500 FVOCI 2,000
In 2021, Milka Company purchased an investment in equity securities. The related data of December 31, 2021: Security No. of shares Initial Cost Fair value Transaction cost A 6,000 P300,000 P295,000 P15,000 B 8,000 280,000 260,000 20,000 C 10,000 400,000 458,200 20,000 The entity sold 2,400 shares of Security B on January 5, 2022, for P82,500. If measured at FVPL, how much is the unrealized gain in 2021?
In 2021, Milka Company purchased an investment in equity securities. The related data of December 31, 2021: Security No. of shares Initial Cost Fair value Transaction cost A 6,000 P300,000 P295,000 P15,000 B 8,000 280,000 260,000 20,000 C 10,000 400,000 458,200 20,000 The entity sold 2,400 shares of Security B on January 5, 2022, for P82,500. If measured at FVOCI, how much is the net effect on retained earnings in 2022?
Identify how much to add or deduct from the Investment in Associate account of ABC based on the following transactions or events: Dec. 1, 2020 - ABC Bought 3,000 X Corp. shares at P200 per share. The total ordinary shares outstanding of X is 100,000 and each had a par value of P150.
Benevolent Company had the following transactions: 2020 Aug. 1Purchased 1,000 shares of Star Company for P60,000. Oct. 1Purchased 8,000 shares of Star Company for P560,000. 2021 July 1Purchased 6,000 shares of Star Company for P480,000. Oct. 1Sold 5,000 shares of Star Company for P500,000. Use FIFO. 2022 Feb. 1Received 50% share dividend.Nov. 1Received share rights to purchase one new share at P60 for every 5rights tendered. On this date, the right is quoted at P10. Dec. 1Sold all share rights at P15 per right. Required:a.Prepare journal entries to record the transactions using average and FIFO. The share rights are accounted forseparately
6. On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities? Group of answer choices P280,000 P200,000 P400,000 P80,000