GUEST GUM PANY has a stock investment in Marciano Corporation. Described below are the transactions pertaining to this investment: a) On January 2, 29:21: GUEST purchased 1D,f}f}l] shares of P102) parvalue common stock at P11f] per share. The company debited Investment in Stock account. b) The Marciano Corporation was expanding and on March 2, 2021 it issued stock rights to its stocld'rolders. Each right entitles GUEST to purchase one fourth [1&1] share of common stock at par. The market value of the stock on that date was P1 4D per share. There was no quoted price for the rights. No journal entry was made to record the foregoing. c] {in April 2, 211121, GUEST exercised all its stock. rights. The Investment in Stock accou'rt was charged for the amount paid. d) GUEST's acmntant felt that the cash paid for the new shares was merely an assessment since GUEST's proportimate share in Marciano was not changed. Hence, he credited all dividends {5% in December of each year] to the lnvestrnent in Stock accmnt ertjl the debit was fully offset. e] GUEST recein a 50% stock dividend from Marciano in December 2021. Because the shares received were expected to be sold, the companfs president instructed the accotntant not to make any entry for this dividend. The company did sell the dividend shares in January 21122 for P1 ED per share. The proceeds from the sale were credited to income. f] In December 2D22, Marciano's stocks were split on a two-forone basis and the new shares were issued as no par shares. GUEST found that each new share was worth P1!) more than the P1\") per share original acquisition cost For this reason, GUEST decided to debit the Investment in Stock account with the additional shares received at P1211) per share and credited reveme for it. g] In August 21123, GUEST sold one haff [1.2) of its holdings in Marciano at P1DD per share. The proceeds were credited to the Investment in Stock account. GUEST uses the average method in recording disposals of its investment in stock. 4. Prepare the journal entry to record the stock dividend received. 5. Determine the gain or loss on the sale of dividend shares received. 6. How many shares were received by GUEST as a result of the two-for-one stock split? 7. What journal entry should be made to record the stock split? 8. How much gain or loss should have been recognized by GUEST from the sale of stocks in August 2023? 9. How much is the unadjusted balance of the Investment in Stock account on December 31, 2023? 10. How much is the adjusted balance of the Investment in Stock account on December 31, 2023?1. Prepare the journal entry to record the receipt of stock rights on March 2, 2021. 2. What is the total cost of the shares acquired on April 2, 2021? 3. What was the average cost per share of GUEST's Investment in Stock after the exercise of the stock rights on April 2, 2021
