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On January 1, 2019, B Company purchased (00 shares of another entity for P 3 600 000. On Dctober 1, 2019, the entity receives 50 000 stock rights from the investee. Each right entitled the shareholder to acquire one share for P 85. 50 Dn November 30, 2019, Investee Company paid dividends of P20 per share. The market price of the investee's share was P 100 Immediately before the rights were issued and P90 Immediately after the rights were issued. On December 1, 2019, the entity exercised all stock rights. On December 31, 2019, the entity sold 25 000 shares at P 90 per share. The stock rights are not accounted for separately. 5. How much dividend was received by B? 6. What is the gain on sale of investment that should be recognized in 2019 using the FIFO Approach? 7. What is the gain on sale of investment that should be recognized in 2019 using the Average Approach

On January 1, 2019, B Company purchased (00 shares of another entity for P 3 600 000. On Dctober 1, 2019, the entity receives 50 000 stock rights from the investee. Each right entitled the shareholder to acquire one share for P 85. 50 Dn November 30, 2019, Investee Company paid dividends of P20 per share. The market price of the investee's share was P 100 Immediately before the rights were issued and P90 Immediately after the rights were issued. On December 1, 2019, the entity exercised all stock rights. On December 31, 2019, the entity sold 25 000 shares at P 90 per share. The stock rights are not accounted for separately. 5. How much dividend was received by B? 6. What is the gain on sale of investment that should be recognized in 2019 using the FIFO Approach? 7. What is the gain on sale of investment that should be recognized in 2019 using the Average Approach

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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On January 1, 2019, B Company purchased 000 shares of another entity for P 3 600 000. On October 1, 2019, the entity receives 50 000 stock rights from the investee. Each right entitled the shareholder to acquire one share for P 85. 50 On November 30, 2019, Investee Company paid dividends of P20 per share. The market price of the investee's share was P 100 immediately before the rights were issued and P90 immediately after the rights were issued. On December 1, 2019, the entity exercised all stock rights. On December 31, 2019, the entity sold 25 000 shares at P 90 per share. The stcck rights are not accounted for separately. 5. How much dividend was received by B? 6. What is the gain on sale of investment that should be recognized in 2019 using the FIFO Approach? 7. What is the gain on sale of investment that should be recognized in 2019 using the Average Approach
Transcribed Image Text:On January 1, 2019, B Company purchased 000 shares of another entity for P 3 600 000. On October 1, 2019, the entity receives 50 000 stock rights from the investee. Each right entitled the shareholder to acquire one share for P 85. 50 On November 30, 2019, Investee Company paid dividends of P20 per share. The market price of the investee's share was P 100 immediately before the rights were issued and P90 immediately after the rights were issued. On December 1, 2019, the entity exercised all stock rights. On December 31, 2019, the entity sold 25 000 shares at P 90 per share. The stcck rights are not accounted for separately. 5. How much dividend was received by B? 6. What is the gain on sale of investment that should be recognized in 2019 using the FIFO Approach? 7. What is the gain on sale of investment that should be recognized in 2019 using the Average Approach
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