On April 5. 2020, Paul Company purchased P50 par, 10,000 ordinary shares of George Company at P80 per share. The shares are designated as equity investments at Fair value through other comprehensive income. On October 26, 2020, Paul received 10,000 rights to purchase an additional 2,000 shares at P90 per share. The share rights received had an expiration date of February 1, 2021. Assuming that all of the share rights are exercised, at which time the market value per ordinary share was P98, what Is the total cost of the new Investment arising from the exercise of these rights? a. P196,000 b. P180,000 c. P160,000 d. P100,000
On April 5. 2020, Paul Company purchased P50 par, 10,000 ordinary shares of George Company at P80 per share. The shares are designated as equity investments at Fair value through other comprehensive income. On October 26, 2020, Paul received 10,000 rights to purchase an additional 2,000 shares at P90 per share. The share rights received had an expiration date of February 1, 2021. Assuming that all of the share rights are exercised, at which time the market value per ordinary share was P98, what Is the total cost of the new Investment arising from the exercise of these rights? a. P196,000 b. P180,000 c. P160,000 d. P100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On April 5. 2020, Paul Company purchased P50 par, 10,000 ordinary shares of George Company at P80 per share. The shares are designated as equity investments at Fair value through other comprehensive income. On October 26, 2020, Paul received 10,000 rights to purchase an additional 2,000 shares at P90 per share. The share rights received had an expiration date of February 1, 2021.
Assuming that all of the share rights are exercised, at which time the market value per ordinary share was P98, what Is the total cost of the new Investment arising from the exercise of these rights?
a. P196,000
b. P180,000
c. P160,000
d. P100,000
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