12. On January 1.2020. Animosity Compony purchased 50000 shares of anotherenfify for P3,800,000. On October 1,2020, frie enfify ieceived 50,000 stock rghtsTrom the investee. Each right entities the holder to acquire one share for P80. hemarket price of investee's stiares wos Pi00 mmediafely before fhe rights were-15Sued and P90 immediotely ofter the rights were issued. On December 1.2020.ihe entity exercised aff stock rights. On Decembe 31,2020, the antity sold 25,000shares at P90per share. The stock rights are not accounted for separately.If the FIFO approach is used.whatis the gain on sale of investment that should berecognized in 20207a. 350.000b. 300,000

Under the FIFO method, the inventory which is purchased first is sold first.

On January1.2020.Animosity Compony purchased 50000 shares of another enfify for P3,800,000. On Ociober 1,2020, fne enfify ieceived 50,000 stock rignts Trom the investee. Eacn right entities the holder to acquire one share for P80. he market price of investee's stares was f100 mmediately tbefore fhe rights were- 1SSued and P90 immediately ofter the righis were issued. On December 1.2020. fhe entify eXercised aff stock rights. On Decembe31,2020, the enfity sold 25,000 shares at P90 per share. The stock rights are not accounted for separately. If the FIFO approach is used. what is the gain on sale of investment ihat shoud be recognized in 20207 a. 350.000

On January1.2020.Animosity Compony purchased 50000 shares of another enfify for P3,800,000. On Ociober 1,2020, fne enfify ieceived 50,000 stock rignts Trom the investee. Eacn right entities the holder to acquire one share for P80. he market price of investee's stares was f100 mmediately tbefore fhe rights were- 1SSued and P90 immediately ofter the righis were issued. On December 1.2020. fhe entify eXercised aff stock rights. On Decembe31,2020, the enfity sold 25,000 shares at P90 per share. The stock rights are not accounted for separately. If the FIFO approach is used. what is the gain on sale of investment ihat shoud be recognized in 20207 a. 350.000

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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