How is the investment income upon exercise of rights

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Q1) On January 1, 2019, Jisoo Company purchased 50,000 shares of another entity for P3,600,000. On October 1, 2019, the entity received 50,000 stock rights from the investee. Each right entitled the shareholder to acquire one share for P80 for every 5 rights. The market price of the investee's share was P100, December 1, 2019, the entity exercised all stock rights.

How is the investment income upon exercise of rights?

Q2) In 2019, Jungkook Company purchased a marketable equity securities for P2,000,000 and held as trading investment. In the year ending 2019, Christian recognized unrealized gain of 300,000.

Below is the composition of the composition of the portfolio of trading securities in December 2020.

Security Cost Market Value

A 400,000 700,000

B 850,000 1,000,000

C 750,000 500,000

What amount of unrealized loss should be reported by Jungkook Company in the year 2020?

Reference no: EM132936876

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