On July 1, 2018, Gang purchased 10,000 shares of Lamina ordinary shares for P510,000 plus broker’s fees of P5,100. The shares represented 25% of the outstanding shares of Bibimbap has an ability to exercise significant influence over the financial and operating policies of Lamina. The acquisition cost reflected the book value of the investee’s net assets as of that date. Lamina reported a profit of P850,000 (evenly earned) for the year ended December 31, 2018. On December 31, 2018, Lamina declared and paid cash dividends of P320,000. On January 1, 2019, Gang sold one-half of the investment in Lamina for P275,000 less broker’s fees of P2,750. Lamina does not have the intention to dispose of the remaining securities in the immediate future. For the year ended December 31, 2019, Lamina reported a profit of P980,000 and declared and paid cash dividends of P450,000. Market value per share of Wings Company ordinary shares were as follows: December 31, 2018 – P55 and December 31, 2019 – P49. How much was the gain or loss on sale of investment on January 1, 2019?
On July 1, 2018, Gang purchased 10,000 shares of Lamina ordinary shares for P510,000 plus broker’s fees of P5,100. The shares represented 25% of the outstanding shares of Bibimbap has an ability to exercise significant influence over the financial and operating policies of Lamina. The acquisition cost reflected the book value of the investee’s net assets as of that date. Lamina reported a profit of P850,000 (evenly earned) for the year ended December 31, 2018. On December 31, 2018, Lamina declared and paid cash dividends of P320,000. On January 1, 2019, Gang sold one-half of the investment in Lamina for P275,000 less broker’s fees of P2,750. Lamina does not have the intention to dispose of the remaining securities in the immediate future. For the year ended December 31, 2019, Lamina reported a profit of P980,000 and declared and paid cash dividends of P450,000. Market value per share of Wings Company ordinary shares were as follows: December 31, 2018 – P55 and December 31, 2019 – P49.
How much was the gain or loss on sale of investment on January 1, 2019?
Step by step
Solved in 2 steps
