Problem 12018Jan 1- Nadayag Company purchased 20.000 shares of Cortez Company P100 par at P110 per shareMar 1 Cortez Company issued rights to Nadayag Company, each permitting the purchase of 1/4 share at par. No entry was made. The bidprice of the share was P140 and there was lo quoted price for the rightsApril 1 Nadayag Company paid the new shares charging the payment to the investment account. Since Nadayag Company felt that it hasbeen assessed by Cortez Company, the dividends received from Cortez Company in 2017 and 2018 wcre credited to the investmentaccount until the debit for payment of the new share was fully offsetDec 31 Nadayag received annual dividend of P250,000 from Cortez Company2019Dec 31-Nadayag received annual dividend of P250,000 from Cortez Company2020Jan 1- Nadayag Company received 50% share dividend from Cortcz Company. On the same date, the shares received as share dividendwere sold at P160 per share and all proceeds were credited to incomeDece 31- The shares of Cortez Company were split 2 for 1. Nadayag Company found that each-new share was worth P5 more than P110paid for the original shares. Accordingly, Nadayag Company debited the investment account with additional shares received at P110 pershare and credited to income2021June 30-Nadayag Company sold one half of the investment at P92 per share and credited the proceeds to investment accountRequirement:1.What is the balance of the investment on December 31, 2020 as it was kept by Nadayag Company?2. Using the average method, what is the correct balance of the investment on December 31, 2020?3. What amout of gain on sales of investment should be reported in 202o?

1) To compute the balance of the investment on December 31, 2020, by journalizing debit to cash and…

Problem 1 2018 Jan 1- Nadayag Company purchased 20.000 shares of Cortez Company P100 par at P110 pr Mar 1-Cortez Company issued rights to Nadayag Company each permitting the purchase of price of the share was P140 and there waso quoted price for the rightS April 1 Nadayag Company paid the new shares charging the payment to the investment acco been assessed by Cortez Company, the dividends received from Cortez Company in 2017 anc account until the debit for payment of the new share was fully offset

Problem 1 2018 Jan 1- Nadayag Company purchased 20.000 shares of Cortez Company P100 par at P110 pr Mar 1-Cortez Company issued rights to Nadayag Company each permitting the purchase of price of the share was P140 and there waso quoted price for the rightS April 1 Nadayag Company paid the new shares charging the payment to the investment acco been assessed by Cortez Company, the dividends received from Cortez Company in 2017 anc account until the debit for payment of the new share was fully offset

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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