please help me answer this problem. With a clear proper format. Thank youuu! On January 1, 2021, Trade Company purchased 40,000 shares at P 100 per share to be held for trading . Brokerage fees amounted to P 120,000. No other transactions occurred in 2021 affecting the investment. What is the initial measurement of the investment? a. P 4,120,000 b. P 4,000,000 c. P 3,920,000 d. P 3,800,000

please help me answer this problem. With a clear proper format. Thank youuu! On January 1, 2021, Trade Company purchased 40,000 shares at P 100 per share to be held for trading . Brokerage fees amounted to P 120,000. No other transactions occurred in 2021 affecting the investment. What is the initial measurement of the investment? a. P 4,120,000 b. P 4,000,000 c. P 3,920,000 d. P 3,800,000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA2: Investments

Section: Chapter Questions

Problem 10MCQ

See similar textbooks

Similar questions

Heritage Ltd. was organized on January 2, 2023. The following investment transactions and events occurred during the following months: 2023 Jan.. 6 Heritage paid $589,500 (including transaction fees of $50) for 51,400 shares (20%) of Port Inc. outstanding common shares. Apr. 30 Port declared and paid a cash dividend of $1.50 per share. Dec. 31 Port announced that its profit for 2023 was $620,000. Fair value of the shares was $13.20 per share. 2024 Oct. 15 Port declared and paid a cash dividend of $1.10 per share. Dec. 31 Port announced that its profit for 2024 was $770,000. Fair value of the shares was $13.58 per share.. 2025 Jan. 5 Heritage sold all of its investment in Port for $696,000 cash. Assume that Heritage has a significant influence over Port with its 20% share. Required: 1. Prepare the entries to record the preceding transactions in Heritage's books. View transaction list Journal entry worksheet < 1 2 3 Ets dabika kinon 4 5 Record the purchase in strategic investment. 6
D1. Account In January 2022, the management of Ivanhoe Company concludes that it has sufficient cash to permit some short-term investments in debt and equity securities. During the year, the following transactions occurred. Feb. 1 Mar. 1 Apr. 1 July 1 Aug. 1 Sept. 1 Oct. 1 Oct. 1 Purchased 800 shares of Muninger common stock for $40,000. Purchased 1,000 shares of Tatman common stock for $25,000. Purchased 70 of $1,100, 8% Yoakem bonds for $77,000. Interest is payable semiannually on April 1 and October 1. Received a cash dividend of $0.60 per share on the Muninger common stock. Sold 266 shares of Muninger common stock at $60 per share. Received a $2 per share cash dividend on the Tatman common stock. Received the semiannual interest on the Yoakem bonds. Sold the Yoakem bonds for $75,300. At December 31, the fair value of the Muninger and Tatman common stocks were $51 and $24 per share respectively. These stock investments by Ivanhoe Company provide less than a 20% ownership interest.…
Test Financial Statement Preparation ( So) Instruction: Prepare a formal Statement of Canh Flows for the year ended December 31, 2021, in thousand Pesos Bebeme Corp provided the following information during 2021 Dividend paid Cash, January 2021 Dividend received Cash received from customens Proceeds from issuing share capital P1,000 1800 s00 9000 1.500 Interest received 200 Proceeds from sale of long term investment Cash paid to suppliers and employees Interest paid on long term debt Income taxes paid 2.000 6,000 400 300 5/8 ...
B. The following is the summarized balance sheet of M Ltd. LIABILITIES 2018 2019 Equity Share Capital 4,00,000 4,80,000 Debentures 1,00,000 Securities Premium 20,000 General Reserve 60,000 1,00,000 Profit & Loss A/C 96,000 1,36,000 Sundry Creditors 2,60,000 3,00,000 Proposed Dividend 40,000 48,000 Provision for Depreciation Plant & Machinery 2,80,000 3,00,000 Furniture 12,000 8,000 12,48,000 13,92,000 ASSETS Land & Building 2,10,000 3,00,000 Plant & Machinery (Cost) 5,80,000 6,40,000 Furniture (Cost) 18,000 20,000 Inventories 2,60,000 2,10,000 Sundry Debtors 1,50,000 1,70,000 Cash 30,000 52,000 12,48,000 13,92,000 ADDITIONAL INFORMATION: 1. Furniture which cost Rs. 10,000, written down value Rs. 2,000 was sold during the year 2019 for Rs. 4,000. 2. Plant and Machinery which cost Rs. 40,000 and in respect of which Rs. 26,000 had been written off as depreciation was sold during the year for Rs. 6,000. 3. The dividend of 2018 was paid during 2019. You are required to prepare Cash Flow…
Sage Corp. carries an account in its general ledger called investments, which contained debits for investment purchases, and no credits, with the following descriptions. Feb, 1, 2025 Sharapova Company common stock, $90 par, 180 shares $35,820 April 1 US government bonds 10%, due April 1, 2035, interest payable April 1 and October 1. 108bonds of $1,000 par each 108,000 July 1 McGrath Compnay 12% bonds, par $50,000, dated March 1, 2025, purchased at 104 plus accrued interest, interest payable annually on March 1, 2045 $54,540 Prepare entries neccessary to classify the amounts into proper accounts, assuming that the debt securities are classified as available for sale. Sharapova 200,000 shares outstanding
Consider the following information of a company: Sale of common stock P 880,000 Sale of preferred stock 1 P 120,000 • Payment of dividends • Purchase of treasury stock P 156,000 P 965,000 Required: Compute net cash provided/used by financing activities using above information. an's screen Nintes Comments Problem 2: The following activities were performed by G-Mar Commercial during the year 2020. Treasury stock purchased P 35,000 • Accounts payable paid P 585,000 2 O• Note receivable collected P 50,000 Dividends paid P 190,000 • Bonds payable issued • Common stock issued P 340,000 P 175,000 Required: Compute net cash provided/used by financing activities to be reported in the statement of cash flows of G-Mar Commercial. • Problem 2: Click to add title Gaisano Center provides the following information for the year 2020 1. Old plant asset sold for P 164,000 and the gain on such sale was of P 5,000. 2. Treasury stock purchased for P 42,000. 3. Investment purchased for P 25,000 3 4. A new…
Assume you are given the following information for firms A and B: A В $1,563,400.00 $2,357,316.00 $2,051,347.00 $1,257,431.00 Price $31.25 $31.25 i 13.52% 13.52% EBIT $97,347.00 $97,347.00 No taxes How do you replicate an investment in 79% of stock B by using stock A? What is the return of the replicating strategy?
Haricot Corporation and Pinto Corporation both have operating profits of $165 million. Haricot is financed solely by equity, while Pinto has issued $215 million of 6% debt. If the corporate tax rate is 21%: Required: a. How much tax does each company pay? b. What is the total payout to investors (debtholders plus shareholders) of each company? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required A Required B How much tax does each company pay? Note: Enter your answer in dollars not in millions. Tax Amount Haricot Pinto $ 21 x $ 21 x
If an investor invested OMR 10,000 in Equity Share and OMR 8,000 in Bonds of an SAOG company in Muscat Stock Exchange and unfortunately that company is closing down / getting liquidated due to its mismanagement of funds. With the above information, how much money does he recovered from his investments if the company is settling only debt? Select one: A. OMR 18,000 B. OMR 2,000 C. OMR 10,000 D. OMR 8,000
Q.no 3. Below are the statements of Financial Position for HP Desk Corporation for 2019 and 2020. HP desk need to raise PKR 500,000 more capital. Should it go for Equity financing from stock market or loan agreement with a bank at a rate of 10%? Compare and Comment on the liquidity and gearing position of the company. Statement of Financial position for HP desk is given below for the period ending Dec 31 2020 (rounding of ‘000). Statement of Financial position for HP desk is given below for the period ending Dec 31 2019(rounding of ‘000).
Classify transactions by type of activity. E12.1 (LO 1), C Kiley Corporation had these transactions during 2022. a. Purchased a machine for $30,000, giving a long-term note in exchange. b. Issued $50,000 par value common stock for cash. c. Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000. d. Declared and paid a cash dividend of $13,000. e. Sold a long-term investment with a cost of $15,000 for $15,000 cash. f. Collected $16,000 from sale of goods. g. Paid $18,000 to suppliers. Instructions Analyze the transactions and indicate whether each transaction is an operating activity, investing activity, financing activity, or noncash investing and financing activity.
a. Define the equity method b. Use the following example to describe the equity method Presume that Company A bought 30% of Company B’s outstanding common stocks at $400,000 (cash) on 01/01/2020 During 2020, Company B earned net income of $200,000 and paid dividends of $40,000 Provide the journal entries for this equity investment in fiscal year 2020 What is the balance for this equity investment on 12/31/2020? Explain why the accounting numbers obtained using the equity method are misleading