In 2019, ABC Co. bought 10,000 shares of XYZ Co. forP230,000. On September 1, 2019, ABC Co. declared its XYZ Co.shares as dividenda to sharcholders of record on December 1,2019 payahlo om Deoamber 31, 2019. XYZZ Co. shares had thesemarket values:September 1, 2019 P250,000Decermber 1, 2019December 31, 2019 P240,000P260,000The net charge of the dividendl against accumulated profitsduring 2019 nust beA. P230,000B. P240,000C. P250,000D. P260,000

The stock dividend is a method of capitalizing the retained earnings account. It is distributed for…

In 2019, ABC Co. bonght 10,000 shares of XYZ Co. for P230,000. On September 1, 2019, ABC Co. declared its XYZ Co. shares as dividenda to shareholders of record on Deoember 1, 2019 payable on December 31, 2019. XYZ Co. shares had these market values: September 1, 2019 P250,0o0 Decermber 1, 2019 December 31, 2019 P240,000 P260,000 The net charge of the dividened aguinst acumulated profits: during 2019 must be

In 2019, ABC Co. bonght 10,000 shares of XYZ Co. for P230,000. On September 1, 2019, ABC Co. declared its XYZ Co. shares as dividenda to shareholders of record on Deoember 1, 2019 payable on December 31, 2019. XYZ Co. shares had these market values: September 1, 2019 P250,0o0 Decermber 1, 2019 December 31, 2019 P240,000 P260,000 The net charge of the dividened aguinst acumulated profits: during 2019 must be

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 31, 2019, Kier Corporation purchased 30,000 shares of Lord Company's shares at P100 each. On December 31, 2019, Lord Company's shares are selling at P125 per share. On February 1, 2020, Kier received 30,000 rights entitling it to purchase at P130 per share one additional share of Lord for each 10 shares then held. On that date, Lord's shares were selling ex-rights at P145 and the rights were selling at P5.00. If the securities were classified by Kier as Trading Securities at the time of acquisition and assuming the entire share rights were sold at their prevailing market price of P5.00, what amount of gain on sale of share rights should Kier Corporation recognize?
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On September 1, 2019, Napakabasic Co. acquired 5,000 shares of the 20,000, P200 par, outstanding shares of Surepoints Co. for P1,750,000. On Nov. 5, 2019, Surepoints Co. declares a 10% share dividend distributable on Dec. 10, 2019 to shareholders of record at the close of business on Nov. 25, 2019. On March 1, 2020, Surepoints Co. changed the par value of its ordinary from P200 to P100 per share. On July 10, 2020, Surepoints Co. declared a cash dividend of P5 per share that will be paid on August 15, 2020 to shareholders of record at the close of the business on July 31, 2020. On August 1, 2020, Napakabasic Co. Sold 2,200 shares for P170 per share. NOTE: Do not round off in determining the allocated cost of the investment. 1.Using the cost method, what is the gain on sale of investment on August 1, 2020? 2. Using the FVPL method, what is the gain on sale of investment on August 1, 2020?
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