"There are days when nothing goes right... when you stumble and fall... when you just want to cry. To cry a lot, to sleep a lot, or even eat a lot. It's alright, as long as you pick yourself up again." -Yuki Takeya (School-Live!) QUIZ-INVESTMENT IN EQUITY SECURITIES On July 1, 2019, Investor Corp. acquired 8,000 shares of the outstanding, 40,000, P100 par, ordinary shares of Investee Corp. for P1,400,000. The net assets of Investee Corp. on this date are valued at P6,000,000. The excess of cost over book value is due to undervalued machinery with a remaining life of 5 years. Net Income of P1,500,000 which was earned evenly throughout the year was reported by Investee Corp. for 2019. No dividends were declared by Investee Corp. for 2019. Instead, special assessments of P5 per share were charged on the shareholders on December 1, 2019. On January 15, 2020, Investee Corp. declared a 5% stock dividend to be distributed on March 5, 2020 to shareholders of record on February 25, 2020. On May 10, 2020, Investee Corp. approved issuance of stock rights to shareholders of record on June 20, 2020. On June 20, 2020, the market value per right was P10 and the market value per share ex-right was P190. Four rights will allow the purchase of one share at par value. The rights will expire on August 31, 2020. All of the rights were exercised by Investor Corp. on August 1, 2020. On September 15, 2020, Investee Corp. declared cash dividends of P8 per share payable on October 31, 2020 to shareholders of record at the close of the business on September 30, 2020. On September 30, 2020, Investor sold 1,050 shares for P220,500. For 2020, Investee Corp. reported net income of P2, 100,000. Required: A. Record the transaction using the cost method on the dates indicated below. Assume the share rights are accounted for separately. Apply FIFO method. A1. July 1, 2019 A6. Sept. 30, 2020 A2. Dec. 1, 2019 A7. Oct. 31, 2020 A3. June 20, 2020 A4. Aug. 1, 2020 A8. and 9. State the balance of the investment on December 31, 2020 in: A8. Block #1 A5. Sept. 15, 2020 A9. Block #2 Chart of accounts: A Cash B Dividends Receivable D Share Rights C Investment in Investee Corp. F E Dividend Income Gain on Sale of Investment