For the next (2) two questions: STU Company purchased 10,000 shares representing 2% ownership of Greg Company on February 15, 2020 for P3,500,000 and is accounted for as a financial asset at fair value through profit or loss. STU Company received a 20% stock dividend on March 31, 2020, when the market value per share was P400. Greg Company paid a cash dividend of P15 per share on September 15, 2020 which was declared on July 11, 2020 to shareholders of record on August 19, 2020. On August 1, 2020, when the market value per share was P325, STU Company sold 3,000 shares of Greg Company for a total consideration of P1,000,000. 7. In the income statement for the fiscal year ended October 31, 2020, what amount should be reported as dividend income? Prepare all required journal entries on August 1, 2020 relevant to the sale of the shares.

For the next (2) two questions: STU Company purchased 10,000 shares representing 2% ownership of Greg Company on February 15, 2020 for P3,500,000 and is accounted for as a financial asset at fair value through profit or loss. STU Company received a 20% stock dividend on March 31, 2020, when the market value per share was P400. Greg Company paid a cash dividend of P15 per share on September 15, 2020 which was declared on July 11, 2020 to shareholders of record on August 19, 2020. On August 1, 2020, when the market value per share was P325, STU Company sold 3,000 shares of Greg Company for a total consideration of P1,000,000. 7. In the income statement for the fiscal year ended October 31, 2020, what amount should be reported as dividend income? Prepare all required journal entries on August 1, 2020 relevant to the sale of the shares.

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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On December 1, 2020, Citrus purchased 200,000 shares representing 45 percent of the outstanding stock of Berry for cash of P2,500,000. As a result of this purchase, Citrus has the ability to exercise significant influence over the operating and financial policies of Berry. 45 percent of the profit of Berry amounted to P20,000 for the month of December and P350,000 for the year ended December 31, 2020. On January 15, 2021, cash dividends of PO.30 per share were paid to shareholders of record on December 31, 2020. Citrus' longterm investment in Berry should be shown in Citrus' December 31, 2020, statement of financial position at:
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On January 1, 2022, Mojito Corporation purchased 20% (20,000 shares) of the outstanding stock of Dulcinea Corporation for $153,000. During 2022, Dulcinea Corporation paid total dividends of $45,000 and earned $80,000 in net income. At the end of 2022, Dulcinea Corporation’s stock had a fair market value of $155,000. Required: Prepare the journal entries that Mojito would make during 2022 assuming that they do NOT have significant influence over Dulcinea as a result of their stock ownership (i.e. fair value method). Prepare the journal entries that Mojito would make during 2022 assuming that they do have significant influence over Dulcinea as a result of their stock ownership (i.e. equity method).
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On December 1, 2020, Citrus purchased 200.000 shares representing 45 percent of the outstanding stock of Berry for cash of P2.500,000. As a result of this purchase. Citrus has the ability to exercise significant influence over the operating and financial policies of Berry 45 percent of the profit of Berry amounted to P20,000 for the month of December and P350,000 for the year ended December 31, 2020 On January 15, 2021, cash dividends of PO.30 per share were paid to shareholders of record on December 31. 2020. Citrus longterm investment in Berry should be shown in Citrus December 31, 2020, statement of financial position at:
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