On September 1, 2019, Napakabasic Co. acquired 5,000 shares of the 20,000, P200 par, outstanding shares of Surepoints Co. for P1,750,000. On Nov. 5, 2019, Surepoints Co. declares a 10% share dividend distributable on Dec. 10, 2019 to shareholders of record at the close of business on Nov. 25, 2019. On March 1, 2020, Surepoints Co. changed the par value of its ordinary from P200 to P100 per share. On July 10, 2020, Surepoints Co. declared a cash dividend of P5 per share that will be paid on August 15, 2020 to shareholders of record at the close of the business on July 31, 2020. On August 1, 2020, Napakabasic Co. Sold 2,200 shares for P170 per share. NOTE: Do not round off in determining the allocated cost of the investment. 1.Using the cost method, what is the gain on sale of investment on August 1, 2020? 2. Using the FVPL method, what is the gain on sale of investment on August 1, 2020?
On September 1, 2019, Napakabasic Co. acquired 5,000 shares of the 20,000, P200 par, outstanding shares of Surepoints Co. for P1,750,000. On Nov. 5, 2019, Surepoints Co. declares a 10% share dividend distributable on Dec. 10, 2019 to shareholders of record at the close of business on Nov. 25, 2019. On March 1, 2020, Surepoints Co. changed the par value of its ordinary from P200 to P100 per share. On July 10, 2020, Surepoints Co. declared a cash dividend of P5 per share that will be paid on August 15, 2020 to shareholders of record at the close of the business on July 31, 2020. On August 1, 2020, Napakabasic Co. Sold 2,200 shares for P170 per share. NOTE: Do not round off in determining the allocated cost of the investment. 1.Using the cost method, what is the gain on sale of investment on August 1, 2020? 2. Using the FVPL method, what is the gain on sale of investment on August 1, 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On September 1, 2019, Napakabasic Co. acquired 5,000 shares of the 20,000, P200 par, outstanding shares of Surepoints Co. for P1,750,000. On Nov. 5, 2019, Surepoints Co. declares a 10% share dividend distributable on Dec. 10, 2019 to shareholders of record at the close of business on Nov. 25, 2019. On March 1, 2020, Surepoints Co. changed the par value of its ordinary from P200 to P100 per share. On July 10, 2020, Surepoints Co. declared a cash dividend of P5 per share that will be paid on August 15, 2020 to shareholders of record at the close of the business on July 31, 2020. On August 1, 2020, Napakabasic Co. Sold 2,200 shares for P170 per share. NOTE: Do not round off in determining the allocated cost of the investment. 1.Using the cost method, what is the gain on sale of investment on August 1, 2020? 2. Using the FVPL method, what is the gain on sale of investment on August 1, 2020?
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