On January 1 of the current year, Philips Company, an investor, held 10,000 shares of Sunshine Company, acquired at a total cost of P1,980,000. On October 1 of the current year, Sunshine Company issued rights to subscribe to new stock at P165 per share in the ratio of one share for every five rights held. The share has market value of P209 and the right has a market value of P11 at the time of issuance. Philips Company did not account for the stock rights spearately and subsequently exercise all stock rights during the current year. What amount should be reported by Philips as an investment in Supremes Company at the end of the current year?
On January 1 of the current year, Philips Company, an investor, held 10,000 shares of Sunshine Company, acquired at a total cost of P1,980,000. On October 1 of the current year, Sunshine Company issued rights to subscribe to new stock at P165 per share in the ratio of one share for every five rights held. The share has market value of P209 and the right has a market value of P11 at the time of issuance. Philips Company did not account for the stock rights spearately and subsequently exercise all stock rights during the current year. What amount should be reported by Philips as an investment in Supremes Company at the end of the current year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1 of the current year, Philips Company, an investor, held 10,000 shares of Sunshine Company, acquired at a total cost of P1,980,000.
On October 1 of the current year, Sunshine Company issued rights to subscribe to new stock at P165 per share in the ratio of one share for every five rights held. The share has market value of P209 and the right has a market value of P11 at the time of issuance.
Philips Company did not account for the stock rights spearately and subsequently exercise all stock rights during the current year.
What amount should be reported by Philips as an investment in Supremes Company at the end of the current year?
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