The securities owned by Jane Company were held as a long-term investment. During the current year, the following transactions occurred: Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share. May 1 Purchased 8,000 shares of XYZ Corporation for P660,000. Apr 1 Received a cash dividend of P6 per share from ABC Company. July 1 Received a share for a share dividend from XYZ Corporation. Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each. Oct 1 Received a cash dividend of P6 per share from ABC Company. Oct 31 XYZ Corporation offered shareholders rights to subscribe to one new share for every ten rights tendered at P25. At the time of issuance, the market value of the right is P4. Share rights are not accounted for separately. Nov 15 Exercised the XYZ Corporation’s share rights. Dec. 1 Sold 10,000 shares of XYZ Corporation at P35 per share. Use the FIFO approach in determining the cost of the shares sold. Dec. 31 The fair values of the portfolio is as follows: ABC Company – P73 per share XYZ Corporation – P75 per share GHI Enterprises – P80 per share REQUIREMENT: How much is the carrying value of the investment at year-end?
The securities owned by Jane Company were held as a long-term investment. During the current
year, the following transactions occurred:
Jan. 1 Purchased 15,000 shares of ABC Company at P70 per share.
May 1 Purchased 8,000 shares of XYZ Corporation for P660,000.
Apr 1 Received a cash dividend of P6 per share from ABC Company.
July 1 Received a share for a share dividend from XYZ Corporation.
Aug 1 Purchased 10,000 shares of GHI Enterprises at P75 each.
Oct 1 Received a cash dividend of P6 per share from ABC Company.
Oct 31 XYZ Corporation offered shareholders rights to subscribe to one new share for every ten
rights tendered at P25. At the time of issuance, the market value of the right is P4. Share
rights are not accounted for separately.
Nov 15 Exercised the XYZ Corporation’s share rights.
Dec. 1 Sold 10,000 shares of XYZ Corporation at P35 per share. Use the FIFO approach in
determining the cost of the shares sold.
Dec. 31 The fair values of the portfolio is as follows:
ABC Company – P73 per share
XYZ Corporation – P75 per share
GHI Enterprises – P80 per share
REQUIREMENT:
- How much is the carrying value of the investment at year-end?
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