Homework Help is Here – Start Your Trial Now!
Business
Accounting
ABC Company acquired 30,000 shares out of XYZ Company's 100,000 outstanding share on January 1,2020 for P 3,000,000 when the net assets of XYZ was P 10,000,000. This acquisition gave ABC significant influence over XYZ Company. XYZ earned P 1,000,000 net loss and paid dividends of P 300,000 in 2020 On December 31,2020, market value of each XYZ shares is P 120 On October 20,2021, XYZ declared a 2 for 1 share split. For the year 2021, XYZ reported net income of P2,000,000 and declared and paid P5 cash dividend. On December 31,2021, market value of each XYZ shares is P 125. Answer the following: 1. What total amount must be presented in the profit or loss section of ABC Company for the year 2020 related to his investment in XYZ Company? 2. Assuming ABC Company sold all his XYZ investment on December 31, 2021 for P 125 per share, what total amount must be presented in the profit or loss section of ABC Company for the year 2021 related to his investment in XYZ Company? 3. What total amount must be presented in the profit or loss section of ABC Company for the year 2021 related to his investment in XYZ Company? 4.Assuming ABC Company sold all his XYZ investment on December 31, 2021 for P 125 per share, how much is the gain or loss on sale of the investment?

ABC Company acquired 30,000 shares out of XYZ Company's 100,000 outstanding share on January 1,2020 for P 3,000,000 when the net assets of XYZ was P 10,000,000. This acquisition gave ABC significant influence over XYZ Company. XYZ earned P 1,000,000 net loss and paid dividends of P 300,000 in 2020 On December 31,2020, market value of each XYZ shares is P 120 On October 20,2021, XYZ declared a 2 for 1 share split. For the year 2021, XYZ reported net income of P2,000,000 and declared and paid P5 cash dividend. On December 31,2021, market value of each XYZ shares is P 125. Answer the following: 1. What total amount must be presented in the profit or loss section of ABC Company for the year 2020 related to his investment in XYZ Company? 2. Assuming ABC Company sold all his XYZ investment on December 31, 2021 for P 125 per share, what total amount must be presented in the profit or loss section of ABC Company for the year 2021 related to his investment in XYZ Company? 3. What total amount must be presented in the profit or loss section of ABC Company for the year 2021 related to his investment in XYZ Company? 4.Assuming ABC Company sold all his XYZ investment on December 31, 2021 for P 125 per share, how much is the gain or loss on sale of the investment?

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
See similar textbooks
icon
Related questions
Question
ABC Company acquired 30,000 shares out of XYZ Company's 100,000 outstanding share on January 1,2020 for P 3,000,000 when the net assets of XYZ was P 10,000,000. This acquisition gave ABC significant influence over XYZ Company. XYZ earned P 1,000,000 net loss and paid dividends of P 300,000 in 2020 On December 31,2020, market value of each XYZ shares is P 120 On October 20,2021, XYZ declared a 2 for 1 share split. For the year 2021, XYZ reported net income of P2,000,000 and declared and paid P5 cash dividend. On December 31,2021, market value of each XYZ shares is P 125. Answer the following: 1. What total amount must be presented in the profit or loss section of ABC Company for the year 2020 related to his investment in XYZ Company? 2. Assuming ABC Company sold all his XYZ investment on December 31, 2021 for P 125 per share, what total amount must be presented in the profit or loss section of ABC Company for the year 2021 related to his investment in XYZ Company? 3. What total amount must be presented in the profit or loss section of ABC Company for the year 2021 related to his investment in XYZ Company? 4.Assuming ABC Company sold all his XYZ investment on December 31, 2021 for P 125 per share, how much is the gain or loss on sale of the investment?
Transcribed Image Text:ABC Company acquired 30,000 shares out of XYZ Company's 100,000 outstanding share on January 1,2020 for P 3,000,000 when the net assets of XYZ was P 10,000,000. This acquisition gave ABC significant influence over XYZ Company. XYZ earned P 1,000,000 net loss and paid dividends of P 300,000 in 2020 On December 31,2020, market value of each XYZ shares is P 120 On October 20,2021, XYZ declared a 2 for 1 share split. For the year 2021, XYZ reported net income of P2,000,000 and declared and paid P5 cash dividend. On December 31,2021, market value of each XYZ shares is P 125. Answer the following: 1. What total amount must be presented in the profit or loss section of ABC Company for the year 2020 related to his investment in XYZ Company? 2. Assuming ABC Company sold all his XYZ investment on December 31, 2021 for P 125 per share, what total amount must be presented in the profit or loss section of ABC Company for the year 2021 related to his investment in XYZ Company? 3. What total amount must be presented in the profit or loss section of ABC Company for the year 2021 related to his investment in XYZ Company? 4.Assuming ABC Company sold all his XYZ investment on December 31, 2021 for P 125 per share, how much is the gain or loss on sale of the investment?
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Consolidations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Accounting
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
SWFT Comprehensive Volume 2019
SWFT Comprehensive Volume 2019
Accounting
ISBN:
9780357233306
Author:
Maloney
Publisher:
Cengage
SWFT Corp Partner Estates Trusts
SWFT Corp Partner Estates Trusts
Accounting
ISBN:
9780357161548
Author:
Raabe
Publisher:
Cengage
SWFT Comprehensive Vol 2020
SWFT Comprehensive Vol 2020
Accounting
ISBN:
9780357391723
Author:
Maloney
Publisher:
Cengage
SEE MORE TEXTBOOKS