PROBLEM NO. 4 The LEE BUYS COMPANY had acquired interest in a promising local company, the Silver Tab Company. During your audit of the company's accounts for the year 2005, which was a first audit, you obtained the following: Investment in Silver Tab Company 2003-Jan. 2 30,000 sh @35 P1,050,000 2005-Jul. 15 50,000 sh @40 P2,000,000 2004-Jul. 2 90,000 sh @60 5,400,000 2005-Mar. 2 30,000 sh @70 2,100,000 2005 - Aug. 10 Investment in Red Tab Company P10,000 Dividend Income 2005 January. 2 April 1 August 10 December 20 P120,000 150,000 10,000 100,000 The transactions pertaining to the foregoing for 2005 were as follows: Jan. 2 Received cash dividend (declared on December 1) of P1 per share. Mar. 2 Bought 30,000 shares at P70 per share. Apr. 1 Received cash dividend (declared on March 1 to stockholders of record as of March 10) of P1 per share. July 15 Sold 50,000 shares at P40 per share. Received an "extra" dividend in stock of one share of Red Tab Company for every ten shares of Silver Tab Company. The stock dividend had a market value of P3 per share and its book value on the ledger of Silver Tab Company was P1 per share. Dec. 20 Received cash dividend of P1 per share, declared December 1, out of Silver Tab Company's "Reserve for Depletion". 29 Sold 10,000 Silver Tab Company shares at P90. Cash was received on January 5, 2006. Aug. 10 QUESTIONS: PROBLEM NO. 4 The LEE BUYS COMPANY had acquired interest in a promising local company, the Silver Tab Company. During your audit of the company's accounts for the year 2005, which was a first audit, you obtained the following: Investment in Silver Tab Company 2003-Jan. 2 30,000 sh @35 P1,050,000 2005-Jul. 15 50,000 sh @40 P2,000,000 2004-Jul. 2 90,000 sh @60 5,400,000 2005-Mar. 2 30,000 sh @70 2,100,000 2005 - Aug. 10 Investment in Red Tab Company P10,000 Dividend Income 2005 January. 2 April 1 August 10 December 20 P120,000 150,000 10,000 100,000 The transactions pertaining to the foregoing for 2005 were as follows: Jan. 2 Received cash dividend (declared on December 1) of P1 per share. Mar. 2 Bought 30,000 shares at P70 per share. Apr. 1 Received cash dividend (declared on March 1 to stockholders of record as of March 10) of P1 per share. July 15 Sold 50,000 shares at P40 per share. Received an "extra" dividend in stock of one share of Red Tab Company for every ten shares of Silver Tab Company. The stock dividend had a market value of P3 per share and its book value on the ledger of Silver Tab Company was P1 per share. Dec. 20 Received cash dividend of P1 per share, declared December 1, out of Silver Tab Company's "Reserve for Depletion". 29 Sold 10,000 Silver Tab Company shares at P90. Cash was received on January 5, 2006. Aug. 10 QUESTIONS