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For the next (2) two questions: STU Company purchased 10,000 shares representing 2% ownership of Greg Company on February 15, 2020 for P3,500,000 and is accounted for as a financial asset at fair value through profit or loss. STU Company received a 20% stock dividend on March 31, 2020, when the market value per share was P400. Greg Company paid a cash dividend of P15 per share on September 15, 2020 which was declared on July 11, 2020 to shareholders of record on August 19, 2020. On August 1, 2020, when the market value per share was P325, STU Company sold 3,000 shares of Greg Company for a total consideration of P1,000,000. 7. In the income statement for the fiscal year ended October 31, 2020, what amount should be reported as dividend income? Prepare all required journal entries on August 1, 2020 relevant to the sale of the shares.

For the next (2) two questions: STU Company purchased 10,000 shares representing 2% ownership of Greg Company on February 15, 2020 for P3,500,000 and is accounted for as a financial asset at fair value through profit or loss. STU Company received a 20% stock dividend on March 31, 2020, when the market value per share was P400. Greg Company paid a cash dividend of P15 per share on September 15, 2020 which was declared on July 11, 2020 to shareholders of record on August 19, 2020. On August 1, 2020, when the market value per share was P325, STU Company sold 3,000 shares of Greg Company for a total consideration of P1,000,000. 7. In the income statement for the fiscal year ended October 31, 2020, what amount should be reported as dividend income? Prepare all required journal entries on August 1, 2020 relevant to the sale of the shares.

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 26E
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For the next (2) two questions: STU Company purchased 10,000 shares representing 2% ownership of Greg Company on February 15, 2020 for P3,500,000 and is accounted for as a financial asset at fair value through profit or loss. STU Company received a 20% stock dividend on March 31, 2020, when the market value per share was P400. Greg Company paid a cash dividend of P15 per share on September 15, 2020 which was declared on July 11, 2020 to shareholders of record on August 19, 2020. On August 1, 2020, when the market value per share was P325, STU Company sold 3,000 shares of Greg Company for a total consideration of P1,000,000. 7. In the income statement for the fiscal year ended October 31, 2020, what amount should be reported as dividend income? 8. Prepare all required journal entries on August 1, 2020 relevant to the sale of the shares.
Transcribed Image Text:For the next (2) two questions: STU Company purchased 10,000 shares representing 2% ownership of Greg Company on February 15, 2020 for P3,500,000 and is accounted for as a financial asset at fair value through profit or loss. STU Company received a 20% stock dividend on March 31, 2020, when the market value per share was P400. Greg Company paid a cash dividend of P15 per share on September 15, 2020 which was declared on July 11, 2020 to shareholders of record on August 19, 2020. On August 1, 2020, when the market value per share was P325, STU Company sold 3,000 shares of Greg Company for a total consideration of P1,000,000. 7. In the income statement for the fiscal year ended October 31, 2020, what amount should be reported as dividend income? 8. Prepare all required journal entries on August 1, 2020 relevant to the sale of the shares.
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