The securities owned by Miratloces Company were held as a long-term investment. During the current vear, the following transactions occurred: Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share. May1 Purchased 8,000 shares of DEF Corporation for P660,000. Apr 1 Beceived a cash dividend of P6 per share from ABC Company. July 1 Beseived a share for a share dividend from DEF Corporation. Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each. Oct 1 Beseived a cash dividend of P6 per share from ABC Company. Oct 31 DEF Corporation offered shareholders rights to subscribe to one new share for every ten rights tendered at P25. At the time of issuance, the market value of the right is P4. Share rights are not accounted for separately. Nov 15 Exercised the DEF Corporation's share rights. Dec. 1 Sold 10,000 shares of DEF Corporation at P35 per share. Use the FIFO approach in determining the cost of the shares sold. Dec. 31 The fair values of the portfolio is as follows: ABC Company – P73 per share DEF Corporation - P75 per share GHI Enterprises - P80 per share Requirements: 1 Prepare the necessary joumal entries to record the above transactions. 2 How much is the carrying value of the investment at year-end?

The securities owned by Miratloces Company were held as a long-term investment. During the current vear, the following transactions occurred: Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share. May1 Purchased 8,000 shares of DEF Corporation for P660,000. Apr 1 Beceived a cash dividend of P6 per share from ABC Company. July 1 Beseived a share for a share dividend from DEF Corporation. Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each. Oct 1 Beseived a cash dividend of P6 per share from ABC Company. Oct 31 DEF Corporation offered shareholders rights to subscribe to one new share for every ten rights tendered at P25. At the time of issuance, the market value of the right is P4. Share rights are not accounted for separately. Nov 15 Exercised the DEF Corporation's share rights. Dec. 1 Sold 10,000 shares of DEF Corporation at P35 per share. Use the FIFO approach in determining the cost of the shares sold. Dec. 31 The fair values of the portfolio is as follows: ABC Company – P73 per share DEF Corporation - P75 per share GHI Enterprises - P80 per share Requirements: 1 Prepare the necessary joumal entries to record the above transactions. 2 How much is the carrying value of the investment at year-end?

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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