Qutacember 5, 2020, POY company purchased 15,000 shares of SM. SM has 10,000.000 OUTstanding shares. The SM shares were selling at P180 on this date, POY incurred P50,000 fees in connection to the purchase of shares. The shares were held for trading. On July 1, 2021, SM company declared a 2 for 1 share split. On September 28, 2021, SM company sold 12,000 shares for P120 per share. On December 1, 2021, SM declared a P5 cash dividend per share to shareholders as of record on December 15, 2021 payable on January 5, 2022. On March 1, 2022, the management of SM has approved the issuance of share rights to its shareholders as of record on June 1, 2022. Each right gives the holder the right to purchase one ordinary share for P70 for every 5 ordinary shares owned by the shareholder. The rights will expire on September 30, 2022. The market value of the share right at date of record is On August 25, 2022 POY exercised 70% of its share rights. The fair value of the SM shares were as follows: December 31, 2020 December 31, 2021 ugust 25, 2022 recember 31, 2022 P190 P 85 P 92 P100 vestions: 1. How much is the initial carrying value of the investment? fit or loss for 20203 2021? 2022?

Qutacember 5, 2020, POY company purchased 15,000 shares of SM. SM has 10,000.000 OUTstanding shares. The SM shares were selling at P180 on this date, POY incurred P50,000 fees in connection to the purchase of shares. The shares were held for trading. On July 1, 2021, SM company declared a 2 for 1 share split. On September 28, 2021, SM company sold 12,000 shares for P120 per share. On December 1, 2021, SM declared a P5 cash dividend per share to shareholders as of record on December 15, 2021 payable on January 5, 2022. On March 1, 2022, the management of SM has approved the issuance of share rights to its shareholders as of record on June 1, 2022. Each right gives the holder the right to purchase one ordinary share for P70 for every 5 ordinary shares owned by the shareholder. The rights will expire on September 30, 2022. The market value of the share right at date of record is On August 25, 2022 POY exercised 70% of its share rights. The fair value of the SM shares were as follows: December 31, 2020 December 31, 2021 ugust 25, 2022 recember 31, 2022 P190 P 85 P 92 P100 vestions: 1. How much is the initial carrying value of the investment? fit or loss for 20203 2021? 2022?

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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