OOn July 1, 2020, a Filipino entity whose functional currency is Philippine Peso acquired 1,000 common stocks of an American entity at a price of $5 per share. The Filipino entity| accounted the investment in common stocks at financial asset at fair value through profit or loss. On October 1, 2020, the American entity declared and distributed 20% same share dividends to its common stockholders. On December 31, 2020, the common stocks of the American entity are traded at $4 per share. The direct foreign currency exchange rates are $1=P50 on July 1, 2020 and $1=P52 on December 31, 2020. What is the foreign currency gain or loss exclusive of gain or loss on changes in fair value to be recognized Filipino entity for the year ended December 31, 2020?
OOn July 1, 2020, a Filipino entity whose functional currency is Philippine Peso acquired 1,000 common stocks of an American entity at a price of $5 per share. The Filipino entity| accounted the investment in common stocks at financial asset at fair value through profit or loss. On October 1, 2020, the American entity declared and distributed 20% same share dividends to its common stockholders. On December 31, 2020, the common stocks of the American entity are traded at $4 per share. The direct foreign currency exchange rates are $1=P50 on July 1, 2020 and $1=P52 on December 31, 2020. What is the foreign currency gain or loss exclusive of gain or loss on changes in fair value to be recognized Filipino entity for the year ended December 31, 2020?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Concept explainers
Question
Please include a solution
Transcribed Image Text:20) On July 1, 2020, a Filipino entity whose functional currency is Philippine Peso acquired
1,000 common stocks of an American entity at a price of $5 per share. The Filipino entity
accounted the investment in common stocks at financial asset at fair value through profit
or loss. On October 1, 2020, the American entity declared and distributed 20% same
share dividends to its common stockholders. On December 31, 2020, the common
stocks of the American entity are traded at $4 per share. The direct foreign currency
exchange rates are $1=P50 on July 1, 2020 and $1=P52 on December 31, 2020. What
is the foreign currency gain or loss exclusive of gain or loss on changes in fair value to
be recognized Filipino entity for the year ended December 31, 2020?
a. P8,000 gain
b. P10,000 gain
c. P9,600 gain
d. P8,400 gain
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education