Anti Corp. purchased 10,000 shares of Pro Corp. at P60 per share. The shares represent less than 5% ownership in Pro Corp. The shares are classified at fair value through profit or loss. Fair value at December 31, Year 1 was P66. At the beginning of Year 2, Pro Corp. issued rights to purchase one ordinary share for every five rights submitted plus P50. Immediately after the rights were issued, the ordinary share was selling for P70 per share. REQUIRED: (a) Assume that all the rights were sold at the market price of P5. Give the entry to record this sale. (b) Assume that Anti Corp. exercised all the rights, when the market price of each Pro Corporation ordinary was P75. Give the entry to record the exercise of the rights and the valuation entry at year-end, assuming that each share of Pro Corporation sells at P78 at December 31
Anti Corp. purchased 10,000 shares of Pro Corp. at P60 per share. The shares represent less than 5% ownership in Pro Corp. The shares are classified at fair value through profit or loss. Fair value at December 31, Year 1 was P66. At the beginning of Year 2, Pro Corp. issued rights to purchase one ordinary share for every five rights submitted plus P50. Immediately after the rights were issued, the ordinary share was selling for P70 per share. REQUIRED: (a) Assume that all the rights were sold at the market price of P5. Give the entry to record this sale. (b) Assume that Anti Corp. exercised all the rights, when the market price of each Pro Corporation ordinary was P75. Give the entry to record the exercise of the rights and the valuation entry at year-end, assuming that each share of Pro Corporation sells at P78 at December 31
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter13: Corporations: Earning & Profits And Distributions
Section: Chapter Questions
Problem 31P
Related questions
Question
Give me answer within an hour I will give you positive rating immediately its very urgent ..thankyou..
Transcribed Image Text:Anti Corp. purchased 10,000 shares of Pro Corp. at P60 per share. The shares represent less than
5% ownership in Pro Corp. The shares are classified at fair value through profit or loss. Fair value
at December 31, Year 1 was P66. At the beginning of Year 2, Pro Corp. issued rights to purchase
one ordinary share for every five rights submitted plus P50. Immediately after the rights were
issued, the ordinary share was selling for P70 per share.
REQUIRED:
(a)
Assume that all the rights were sold at the market price of P5. Give the entry to
record this sale.
(b)
Assume that Anti Corp. exercised all the rights, when the market price of each Pro
Corporation ordinary was P75. Give the entry to record the exercise of the rights and
the valuation entry at year-end, assuming that each share of Pro Corporation sells at
P78 at December 31.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
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
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT