BOY Co. acquired 50,000 ordinary shares of GIRL Co. on September 30, 2019 forP8,250,000. On October 30, the shares were split into 2:1 (split-up). On November 30, 2020,Alto Co. distributed 10% ordinary share dividends when the market price of the share wasP250 per share. On December 31, 2020, BOY Co. sold 6,000 of its GIRL shares forP600,000. For the year ended December 31, 2020, how much should BOY report as gain onsale of investment?A. P105,000B. P150,000C. P200,000D. P250,000E. answer not givenWO Inc. acquired 50,000 ordinary shares of Lin Company at P120 per share. On February 14,2019, WO Inc. received 50,000 stock rights entitling it to buy one new share at P90 for everytwo rights held. On February 14, 2019, the market value of each share is P130 while that ofeach right is P20. On March 1, 2019, all the stock rights were exercised. If share rights areaccounted for separately, what is the total cost of the new investment in ordinary sharesacquired?A P2,250,000B. P3,050,000C. P3,250,000D. P5,500,000E. answer not givenABC Co. purchased 10,000 shares (2% ownership) of DEF Co on February 14, 2020.ABC Co. received a share dividend of 2,000 shares on April 30, 2020, when themarket value per share was P35. DEF Co. paid a cash dividend of P2 per share onDecember 15, 2020. In its 2020 income statement, what amount should ABC Co.report as dividend income?A. P20,000B. P24,000C. P90,000D. P94,000E. answer not given

1. Details of GIRLS Co. shares held by BOYS Co. before and after the share split. Date Cost of…

BOY Co. acquired 50,000 ordinary shares of GIRL Co. on September 30, 2019 for P8,250,000. On October 30, the shares were split into 2:1 (split-up). On November 30, 2020, Alto Co. distributed 10% ordinary share dividends when the market price of the share was P250 per share. On December 31, 2020, BOY Co. sold 6,000 of its GIRL shares for P600,000. For the year ended December 31 , 2020, how much should BOY report as gain on sale of investment?

BOY Co. acquired 50,000 ordinary shares of GIRL Co. on September 30, 2019 for P8,250,000. On October 30, the shares were split into 2:1 (split-up). On November 30, 2020, Alto Co. distributed 10% ordinary share dividends when the market price of the share was P250 per share. On December 31, 2020, BOY Co. sold 6,000 of its GIRL shares for P600,000. For the year ended December 31 , 2020, how much should BOY report as gain on sale of investment?

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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