On January 1, 2019, Blackpink Company purchased 50,000 shares of another entity for P3,600,000. On October 1, 2019, the entity received 50,000 stock rights from the investee. Each right entitled the shareholder to acquire one share for P80 for every 5 rights. The market price of the investee’s share was P100, December 1, 2019, the entity exercised all stock rights. How is the investment income upon exercise of rights?

On January 1, 2019, Blackpink Company purchased 50,000 shares of another entity for P3,600,000. On October 1, 2019, the entity received 50,000 stock rights from the investee. Each right entitled the shareholder to acquire one share for P80 for every 5 rights. The market price of the investee’s share was P100, December 1, 2019, the entity exercised all stock rights. How is the investment income upon exercise of rights?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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