Reference no: EM132951175
Question - The following transactions for the long-term, fair value through other comprehensive income investments of Persistent Corporation, took place in 2020: FEB 10-Persistent acquired 10,000 shares of Disciplined Co. ordinary share at P88 per share. MARCH 31- Disciplined Co. issued a 10% stock dividend to ordinary shareholders. JUNE 30- Disciplined Co. issued rights to ordinary shareholders for the acquisition of one additional share at P90 for every five shares held. The ordinary share was trading ex-rights at P114 a share and the rights had a fair market value of P6 per right. JULY 31- Persistent exercised 10,000 rights to acquire new shares. JULY 20- The remaining 1,000 rights were sold for P5.50 each. OCT 12- Persistent sold 4,000 shares of Disciplined Co. ordinary share for P440,000. The shares sold were specifically identified as being from those acquired on February 10.
Required - Based on the above data and the result of your audit, determine the following:
1) The cost of the stock rights to be recorded on June 30, 2020.
2) The cost of investment acquired on July 13, 2020.
3) Gain or loss on sale of the remaining rights sold on July 20, 2020.
4) The realized gain or loss on the sale of the 4,000 shares sold on October 12, 2020.
5) The adjusted balance of the investment account for the year ended December 31, 2020.
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