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Maxim Company acquired 40,000 ordinary shares on October Problem 16-12 (AICPA Adapted) 1 for P6,600,000 to be held for trading. On November 30, the investee distributed a 10% ordinary share dividend when the market price of the share was P250. On December 31, the entity sold 4,000 shares for P1,000,000. What amount should be reported as gain on sale of investment in the current year? a. 340,000 b. 400,000 c. 500,000 d. 600,000

Maxim Company acquired 40,000 ordinary shares on October Problem 16-12 (AICPA Adapted) 1 for P6,600,000 to be held for trading. On November 30, the investee distributed a 10% ordinary share dividend when the market price of the share was P250. On December 31, the entity sold 4,000 shares for P1,000,000. What amount should be reported as gain on sale of investment in the current year? a. 340,000 b. 400,000 c. 500,000 d. 600,000

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 8MCQ
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Problem 16-12 (AICPA Adapted) Maxim Company acquired 40,000 ordinary shares on October 1 for P6,600,000 to be held for trading. On November 30, the investee distributed a 10% ordinary share dividend when the market price of the share was P250. On December 31, the entity sold 4,000 shares for P1,000,000. What amount should be reported as gain on sale of investment in the current year? a. 340,000 b. 400,000 c. 500,000 d. 600,000
Transcribed Image Text:Problem 16-12 (AICPA Adapted) Maxim Company acquired 40,000 ordinary shares on October 1 for P6,600,000 to be held for trading. On November 30, the investee distributed a 10% ordinary share dividend when the market price of the share was P250. On December 31, the entity sold 4,000 shares for P1,000,000. What amount should be reported as gain on sale of investment in the current year? a. 340,000 b. 400,000 c. 500,000 d. 600,000
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