Maxim Company acquired 40,000 ordinary shares on October Problem 16-12 (AICPA Adapted) 1 for P6,600,000 to be held for trading. On November 30, the investee distributed a 10% ordinary share dividend when the market price of the share was P250. On December 31, the entity sold 4,000 shares for P1,000,000. What amount should be reported as gain on sale of investment in the current year? a. 340,000 b. 400,000 c. 500,000 d. 600,000
Maxim Company acquired 40,000 ordinary shares on October Problem 16-12 (AICPA Adapted) 1 for P6,600,000 to be held for trading. On November 30, the investee distributed a 10% ordinary share dividend when the market price of the share was P250. On December 31, the entity sold 4,000 shares for P1,000,000. What amount should be reported as gain on sale of investment in the current year? a. 340,000 b. 400,000 c. 500,000 d. 600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 16-12 (AICPA Adapted)
Maxim Company acquired 40,000 ordinary shares on October
1 for P6,600,000 to be held for trading.
On November 30, the investee distributed a 10% ordinary
share dividend when the market price of the share was P250.
On December 31, the entity sold 4,000 shares for P1,000,000.
What amount should be reported as gain on sale of investment
in the current year?
a. 340,000
b. 400,000
c. 500,000
d. 600,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Faf8bcbe3-eec9-4d26-a9dc-5092bca61f50%2F91c317ab-98c0-42de-b057-aeaf50347d07%2Ffbuc3vs_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 16-12 (AICPA Adapted)
Maxim Company acquired 40,000 ordinary shares on October
1 for P6,600,000 to be held for trading.
On November 30, the investee distributed a 10% ordinary
share dividend when the market price of the share was P250.
On December 31, the entity sold 4,000 shares for P1,000,000.
What amount should be reported as gain on sale of investment
in the current year?
a. 340,000
b. 400,000
c. 500,000
d. 600,000
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