PINK Company purchased 50,000 shares (5% ownership) of WHITE Company on January 2, 2020 at ₱34 per share. PINK received a stock dividend of 15% on March 31, 2020 when the market price of the share is ₱40. On November 30, PINK paid ₱20 per share special assessment on the shares. On December 15, 2020, WHITE paid a cash dividend of ₱8 per share. On December 31, the prevailing market price of the trading security is at ₱49 per share. 1. What amount should be reported as dividend income on the December 31, 2020 income statement? a. ₱ 60,000 b. ₱ 150,000 c. ₱ 460,000 d. ₱ 400,000 2. How much is the unrealized gain(loss) that should be presented in the statement of comprehensive income? a. ₱ 250,000 loss b. ₱ 750,000 gain c. ₱ 117,500 gain d. ₱ 32,500 loss 3. What is the carrying value of the above investment on December 31, 2020? a. ₱ 2,817,500 b. ₱ 3,105,000 c. ₱ 2,450,000 d. ₱ 2,700,000
PINK Company purchased 50,000 shares (5% ownership) of WHITE Company on January 2, 2020 at ₱34 per share. PINK received a stock dividend of 15% on March 31, 2020 when the market price of the share is ₱40. On November 30, PINK paid ₱20 per share special assessment on the shares. On December 15, 2020, WHITE paid a cash dividend of ₱8 per share. On December 31, the prevailing market price of the trading security is at ₱49 per share. 1. What amount should be reported as dividend income on the December 31, 2020 income statement? a. ₱ 60,000 b. ₱ 150,000 c. ₱ 460,000 d. ₱ 400,000 2. How much is the unrealized gain(loss) that should be presented in the statement of comprehensive income? a. ₱ 250,000 loss b. ₱ 750,000 gain c. ₱ 117,500 gain d. ₱ 32,500 loss 3. What is the carrying value of the above investment on December 31, 2020? a. ₱ 2,817,500 b. ₱ 3,105,000 c. ₱ 2,450,000 d. ₱ 2,700,000
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 50P
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PINK Company purchased 50,000 shares (5% ownership) of WHITE Company on January 2, 2020 at ₱34 per share. PINK received a stock dividend of 15% on March 31, 2020 when the market price of the share is ₱40. On November 30, PINK paid ₱20 per share special assessment on the shares. On December 15, 2020, WHITE paid a cash dividend of ₱8 per share. On December 31, the prevailing market price of the trading security is at ₱49 per share.
1. What amount should be reported as dividend income on the December 31, 2020 income statement?
a. ₱ 60,000
b. ₱ 150,000
c. ₱ 460,000
d. ₱ 400,000
2. How much is the unrealized gain(loss) that should be presented in the statement of comprehensive income?
a. ₱ 250,000 loss
b. ₱ 750,000 gain
c. ₱ 117,500 gain
d. ₱ 32,500 loss
3. What is the carrying value of the above investment on December 31, 2020?
a. ₱ 2,817,500
b. ₱ 3,105,000
c. ₱ 2,450,000
d. ₱ 2,700,000
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