On April 1, 2019, Star Company purchased 30,000 ordinary shares of Moon Company at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Moon had 100,000 ordinary shares outstanding. Star had no ownership interest in Moon before the purchase. The first quarter statement ending March 31, 2019 of Moon recorded earnings of P500,000. For the year remaining 9 months of 2019, Moon reported profit of P2,800,000. White paid Star dividends of P80,000 on June 1 and again P70,000 on December 31, 2019. During 2020, Moon reported profit of P2,000,000 and paid dividends of P2,000,000 to jits shareholders. On January 1, 2021, Star sold 10,000 ordinary shares of Moon for P220 per share. For the year ended December 31, 2021, the reported profit of Moon was P2,500,000 and dividends of P60,000 were paid to Star. The market value of Moon shares remained unchanged during the year 2021. Refer to Star Company. The gain of Star Company on the sale of 10,000 ordinary shares of Moon was:
On April 1, 2019, Star Company purchased 30,000 ordinary shares of Moon Company at P180 per share, a price that approximates book value as of that date. At the time of the purchase, Moon had 100,000 ordinary shares outstanding. Star had no ownership interest in Moon before the purchase. The first quarter statement ending March 31, 2019 of Moon recorded earnings of P500,000. For the year remaining 9 months of 2019, Moon reported profit of P2,800,000. White paid Star dividends of P80,000 on June 1 and again P70,000 on December 31, 2019. During 2020, Moon reported profit of P2,000,000 and paid dividends of P2,000,000 to jits shareholders. On January 1, 2021, Star sold 10,000 ordinary shares of Moon for P220 per share.
For the year ended December 31, 2021, the reported profit of Moon was P2,500,000 and dividends of P60,000 were paid to Star. The market value of Moon shares remained unchanged during the year 2021.
Refer to Star Company. The gain of Star Company on the sale of 10,000 ordinary shares of Moon was:
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