Parent Company owns 80,000 shares of Subsidiary Company’s 100,000 outstanding ordinary shares, acquired at book value. The December 31, 20x8, consolidated balance sheet presented by Parent and Subsidiary included net assets of Subsidiary in the amount of P600,000. On January 1, 20x9, Parent sells 10,000 shares (10%) of its Subsidiary stock to unrelated parties for P70,000. Determine the gain or loss on disposal of shares to be recognized in the PROFIT OR LOSS STATEMENT.

Parent Company owns 80,000 shares of Subsidiary Company’s 100,000 outstanding ordinary shares, acquired at book value. The December 31, 20x8, consolidated balance sheet presented by Parent and Subsidiary included net assets of Subsidiary in the amount of P600,000. On January 1, 20x9, Parent sells 10,000 shares (10%) of its Subsidiary stock to unrelated parties for P70,000. Determine the gain or loss on disposal of shares to be recognized in the PROFIT OR LOSS STATEMENT.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter20: Corporations: Distributions In Complete Liquidation And An Overview Of Reorganizations

Section: Chapter Questions

Problem 38P

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