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10. 11. 12. On January 2, 2014, Gamu |Company purchased as a long term investment 10,000 shares ordinary shares of llagan Corporation for P 20
10. 11. 12. On January 2, 2014, Gamu |Company purchased as a long term investment 10,000 shares ordinary shares of llagan Corporation for P 20 per share, which represents a 1% interest. Du July 1, Ilagan |Corporation declared its annual dividend on its ordinary shares of P 5 per share payable on August 1 to shareholder's of record at July 25, 2014. [in July 20, 2014 Gamu needed additional cash for operations and sold all 10,000 shares Hagan for P 100 per share. Por the year ended December 31, 2014, Gamu should report on its income statement a gain on disposal of a. P 300,000 c. P 125,000 h. P210,000 d. P250,000 Pimor lCompany owned 50,000 shares of another entity. These 50,000 shares were originally purchased for P 100 per share. {in October 1, 2015, the investee distributed 50,000 rights to the entity. The entity was entitled to buy one new share for P 1:10 and five of these rights. [in October 1, 2015, each share had a market value of P 150 and each right had market value of P 10. On December 31, 2015, the entity exercised all rights. The stock rights are accounted for separately and measured initially fair value. What total cost should be recorded for the new shares that are acquired by exercising the rights? a. 1,400,000 c. 1,050,000 b. 1,000,000 d. 1,000,000 Aira Company issued rights to subscribe to its stock, the ovmership of 4 shares entitling the shareholders to subscribe for 1 share at P 100. Pin investor owned 50,000 shares with total cost of P 5,000,000. The share is quoted righton at 125. The stock rights are accumulated for separately and measured initially at fair value. What is the cost of the new investment assuming all of the rights are exercised by the investor? a. 1,500,000 c. 1,502,500 b. 1,250,000 0. 1,450,000
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