Reference no: EM132785309

Problem 1: Determine the amount of dividend income from each class of investments in equity  instruments by Fruit Basket (FB) Company for 2016

a. FB Company owns a 15% interest in Lemon Company which declared a P1,600,000 cash dividend on November 20, 2016 to stockholders of record on December 20, 2016 payable on January 20, 2017.

b. Received from Kiwi Company P396,000 in lieu of a 20% stock dividend. FB Company owns 120,000 of the total 1,000,000 outstanding shares of Kiwi Company which it has acquired for P1,800,000

c. Apple Company declared a 15% stock dividend on July 15, 2016 at which the Apple Company's shares was quoted at P8 per share. FB Company owns 10,000 Apple Company shares

d. Received 3,000 common shares of Banana Company in lieu of cash dividend. The market price of Banana Company's shares was P230.

e. Received a cash dividend of P150,000 from Orange Company which was identified as a liquidating dividend.

f. FB Company received from Melon Company a dividend in kind of one share of Peach, Company's common stock for every 5 Melon Company common shares held. FB Company holds 60,000 Melon Company share. Peach Company shares were currently selling at P25 per share.

g. FB company owns 4,000 of Pomelo Company's P100 par 9% cumulative preferred stocks of which 10,000 were issued and outstanding. No dividend had been declared or paid since 2015. Pomelo Company declared dividends to cover all dividends in arrears.

h. FB Company owns 1,000 of Pear Company's P20 par, 8% cumulative, fully- participating preference shares of which 2,500 were issued and outstanding, as well as, 5,000 of Pear Company's P5 par value ordinary shares of which 40,000 dividends declared on December 30, 2016 amounted to P390,000

i. Cash dividend of P450,000 from Berry Company in which FB Company owns a 25% interest giving FB Company significant influence over Berry Company.