Moon Company held 40,000 shares purchased for P75 per share as noncurrent investment. The following transactions pertain to such investment in the chronological order. 1. Received share rights to purchase one new share at P80. Two rights are required to acquire one share. The market value of the right at issuance date is P10. 2. Exercised 30,000 rights. 3. Sold 6,000 rights at P12 per right. 4. The remaining rights expired. Required: a. Prepare journal entries to record the transactions assuming share rights are accounted for separately. b. Summarize the investments stating the number of shares and cost.
Moon Company held 40,000 shares purchased for P75 per share as noncurrent investment. The following transactions pertain to such investment in the chronological order. 1. Received share rights to purchase one new share at P80. Two rights are required to acquire one share. The market value of the right at issuance date is P10. 2. Exercised 30,000 rights. 3. Sold 6,000 rights at P12 per right. 4. The remaining rights expired. Required: a. Prepare journal entries to record the transactions assuming share rights are accounted for separately. b. Summarize the investments stating the number of shares and cost.
Chapter1: Financial Statements And Business Decisions
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Problem 16-6 (ACP)
Moon Company held 40,000 shares purchased for P75 per share
as noncurrent investment. The following transactions pertain
to such investment in the chronological order.
uired at a w
counted fr
1. Received share rights to purchase one new share at P80.
Two rights are required to acquire one share. The market
value of the right at issuance date is P10.
2. Exercised 30,000 rights.
3. Sold 6,000 rights at P12 per right.
4. The remaining rights expired.
a. Prepare journal entries to record the transactions assuming
share rights are accounted for separately.
the acquiti Required:
b. Summarize the investments stating the number of shares
and cost.
the rghe!
E TA
w share forn
N on ag
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