Santo, Inc. acquired 30% of Nino Corp.'s voting stock on January 1, 2019 for P360,000. During 2019, Nino earned P150,000 and paid dividends of P90,000. Santo's 30% interest in Nino gives Santo the ability to exercise significant influence over Nino's operating and financial policies. During 2020, Nino earned P180,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2020, Santo sold half of its stock in Nino for its fair value of P237,000. Thereafter, Santo, Inc. designated the investment as FVTOCI. The remaining shares of Nino Corp. held by Santo, Inc. have a fair value of P220,000 at December 31, 2020. The gain on sale of investment is O P43.500 O P48.000 O P57,000 O P39.000
Santo, Inc. acquired 30% of Nino Corp.'s voting stock on January 1, 2019 for P360,000. During 2019, Nino earned P150,000 and paid dividends of P90,000. Santo's 30% interest in Nino gives Santo the ability to exercise significant influence over Nino's operating and financial policies. During 2020, Nino earned P180,000 and paid dividends of P60,000 on April 1 and P60,000 on October 1. On July 1, 2020, Santo sold half of its stock in Nino for its fair value of P237,000. Thereafter, Santo, Inc. designated the investment as FVTOCI. The remaining shares of Nino Corp. held by Santo, Inc. have a fair value of P220,000 at December 31, 2020. The gain on sale of investment is O P43.500 O P48.000 O P57,000 O P39.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please explain in detail
Transcribed Image Text:Santo, Inc. acquired 30% of Nino Corp.'s voting stock on January 1, 2019 for
P360,000. During 2019, Nino earned P150,000 and paid dividends of P90,000.
Santo's 30% interest in Nino gives Santo the ability to exercise significant influence
over Nino's operating and financial policies. During 2020, Nino earned P180,000 and
paid dividends of P60,000 on April 1 and P60,000 on October 1.
On July 1, 2020, Santo sold half of its stock in Nino for its fair value of P237,000.
Thereafter, Santo, Inc. designated the investment as FVTOCI. The remaining shares of
Nino Corp. held by Santo, Inc. have a fair value of P220,000 at December 31, 2020.
The gain on sale of investment is
P43.500
O P48.000
O P57.000
O P39.000
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 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education