Problem 2 (Property Dividend)

Goodie Corporation owns 20,000 shares of JFC Corporation recorded as Investment in JFC Corporation amounting to P 1.1 million as of December 31, 2019.

On December 15, 2020, Goodie Corporation declared a property dividend to shareholders of record of December 30, distributable on January 5, 2021. The corporation will distribute three (3) ordinary shares of JFC Corporation for every share of Goodie Corporation owned by the shareholders. Goodie Corporation has 5,000 issued and outstanding shares at the time of declaration. The carrying value of JFC as of December 15, 2020 is 60 per share.

The fair market value of JFC Corporation as follows:

December 15 65 per share; December 31 67 per share; January 5 66 per share.

Requirement:

1. Journalize the transactions occurred in relation to property dividends.
2. What will be the gain or loss on January 5, 2021?