2. What amount should be recognized as gain on sale of On July 1, 2021, Queen Company purchased for P2,400,000, 50,000 newly issued 6% cumulative P20 par value preference shares. Each preference share had one share warrant attached which entitled the holder to acquire at P15 one ordinary share of P10 par value for each two warrants held. The market price on this date of the preference share without warrant was P50 and the market price of the share warrant was P10. On December 1, 2021, all the share warrants wre sold for P700,000. 1. What amount should be recorded as cost of the investment in preference shares? a. 2,400,000 b. 2,000,000 c. 1,200,000 d. 1,000,000 warrants? a. 300,000 b. 700,000 c. 400,000 d.
2. What amount should be recognized as gain on sale of On July 1, 2021, Queen Company purchased for P2,400,000, 50,000 newly issued 6% cumulative P20 par value preference shares. Each preference share had one share warrant attached which entitled the holder to acquire at P15 one ordinary share of P10 par value for each two warrants held. The market price on this date of the preference share without warrant was P50 and the market price of the share warrant was P10. On December 1, 2021, all the share warrants wre sold for P700,000. 1. What amount should be recorded as cost of the investment in preference shares? a. 2,400,000 b. 2,000,000 c. 1,200,000 d. 1,000,000 warrants? a. 300,000 b. 700,000 c. 400,000 d.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
100%
Transcribed Image Text:2. What amount should be recognized as gain on sale of
Problem 16-11 (IAA)
On July 1, 2021, Queen Company purchased for P2,400,000,
50,000 newly issued 6% cumulative P20 par value preference
shares. Each preference share had one share warrant attached
which entitled the holder to acquire at P15 one ordinary share
of P10 par value for each two warrants held.
The market price on this date of the preference share without
warrant was P50 and the market price of the share warrant
was P10. On December 1, 2021, all the share warrants wre sold
for P700,000.
1. What amount should be recorded as cost of the investment
in preference shares?
a. 2,400,000
b. 2,000,000
c. 1,200,000
d. 1,000,000
warrants?
a. 300,000
b. 700,000
c. 400,000
d.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education