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Puti Company
Puti Company
Puti Company
Acquired 2,000 ordinary shares of Puraw Company at P20 per share and incurred
transaction costs of P10,000. These shares are to be held for the realization of
short-term profits or for trading purposes.
Acquired additional 4,000 ordinary shares of Puraw at P30 per share. These
shares are to be held for trading purposes.
Acquired 5,000 preference shares from White Company at P40 per share. Puti
incurred transaction costs of P20,000. These shares are to be held at fair value
through other comprehensive income.
At year end, the shares of Puraw are selling at P45 per share while the shares of
Puti are selling at P30 per share.
Acquired 2,000 ordinary shares of Puraw Company at P20 per share and incurred
transaction costs of P10,000. These shares are to be held for the realization of
short-term profits or for trading purposes.
Acquired additional 4,000 ordinary shares of Puraw at P30 per share. These
shares are to be held for trading purposes.
Acquired 5,000 preference shares from White Company at P40 per share. Puti
incurred transaction costs of P20,000. These shares are to be held at fair value
through other comprehensive income.
At year end, the shares of Puraw are selling at P45 per share while the shares of
Puti are selling at P30 per share.
The increase or decrease in net income as a result on remeasurement of the investments
at fair value at the end or the year is
a. P5,000 decrease
b. P25,000 decrease
c. P45,000 increase
d. P25,000 increase
3. On January 1, 2021, Kim Delikado acquired 10,000 shares of Bin Company and
5,000 shares of Yum Company by paying a basket price of P 520,000 exclusive of
transaction costs of P20,000. These investments are to be classified as investments
at fair value through other comprehensive income. On this date, the shares of Bin
Company and Yum Company are both selling for P35 per share. By what amount
shall the investment in Bin Company be initially recognized?
a. P333,333
b. P346,667
c. P180,000
d. P360,000
4. ABC Company acquired 30% of XYZ Company’s voting share capital for P2,000,000
on January 1, 2019. ABC's 30% interest in XYZ gave ABC the ability to exercise
significant influence over XYZ’s operating and financial policies.