Problem 16-12 (IAA)During 2020, Reminiscent Company bought shares of anotherentity to be held for trading.JuneDecember 1120,000 shares @ P10030,000 shares @ P1202,000,0003,600,000Transactions for 2021January 10Received cash dividend at P10 per share.Received 20% share dividend.December 10 Sold 30,000 shares at P125 per share.January201. What is the gain on sale of investment using the FIFOapproach?a. 1,150,000b.950,000150,000550,000с.d.2. What is the gain on sale of investment using the averageapproach?а. 950,000b. 750,000c. 800,000d. 900,0003. What total amount should be reported as income fromthe investment using the FIFO approach?a. 1,650,000b. 1,450,000c. 1,750,000d.500,000

LIFO is short for last in first out. it means the element which is inserted into the structure last…

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1. What is the gain on sale of investment using the FIFO approach?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Problem 16-12 (IAA)
During 2020, Reminiscent Company bought shares of another
entity to be held for trading.
June
December 1
1
20,000 shares @ P100
30,000 shares @ P120
2,000,000
3,600,000
Transactions for 2021
January 10
Received cash dividend at P10 per share.
Received 20% share dividend.
December 10 Sold 30,000 shares at P125 per share.
January
20
1. What is the gain on sale of investment using the FIFO
approach?
a. 1,150,000
b.
950,000
150,000
550,000
с.
d.
2. What is the gain on sale of investment using the average
approach?
а. 950,000
b. 750,000
c. 800,000
d. 900,000
3. What total amount should be reported as income from
the investment using the FIFO approach?
a. 1,650,000
b. 1,450,000
c. 1,750,000
d.
500,000

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