On July 15, 2021, Max Co. acquired 25,000 shares of Chicken Co. for P250,000 which includes P1 cash dividend per share to shareholders of record as of July 30, 2021. Max Co does not have significant influence over Chicken Co. The entity also spent additional P5,000 transaction cost. The dividend was received by Max Co. on August 15, 2021. On November 15, 2021, the Max Co. sold 10,000 shares for P10.5/share. At year- end, Chicken Co.'s shares were selling at P12 per share.
On July 15, 2021, Max Co. acquired 25,000 shares of Chicken Co. for P250,000 which includes P1 cash dividend per share to shareholders of record as of July 30, 2021. Max Co does not have significant influence over Chicken Co. The entity also spent additional P5,000 transaction cost. The dividend was received by Max Co. on August 15, 2021. On November 15, 2021, the Max Co. sold 10,000 shares for P10.5/share. At year- end, Chicken Co.'s shares were selling at P12 per share.
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
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Question
Transcribed Image Text:How much is the combined realized and unrealized gain to be recognized in
profit or loss?
P30,000
P60,000
P55,000
P35,000
Transcribed Image Text:On July 15, 2021, Max Co. acquired 25,000 shares of Chicken Co. for P250,000
which includes P1 cash dividend per share to shareholders of record as of July 30,
2021. Max Co does not have significant influence over Chicken Co. The entity also
spent additional P5,000 transaction cost. The dividend was received by Max Co. on
August 15, 2021.
On November 15, 2021, the Max Co. sold 10,000 shares for P10.5/share. At year-
end, Chicken Co.'s shares were selling at P12 per share.
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