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How much is the dividend income to be recognized

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Reference no: EM133181001

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Q1. Samantha Corporation acquired a patent for a drug with remaining legal ang useful life of six years on January 1, 2019 for P6,000,000.

On January 1, 2021, a new patent is received for an improved version of the same drug. The new patent has a legal and useful life of twenty years.

What should be recorded as amortization expense for 2021?

Q2. Samantha Company owns 500 ordinary shares of Berns Company which has several hundred thousand shares publicly traded. These 500 shares were purchased by Samantha in early part of 2021 for P200 per share. On August 20, 2021, Berns distributed 500 rights to Samantha. Samantha was entitled to buy one new share of Berns ordinary shares at P180 and two share rights. On September 01, 2021, when the market value of Berns ordinary share was P203, Samantha exercised all the rights and received 250 ordinary shares.

How much is the investment income recognized by Samantha Inc. upon exercise of the rights?

Q3. Berns Company owns 15% of the outstanding ordinary shares of Samantha Corp. On November 1, 2021, Samantha declared its inventory as property dividends. Data relating to the fair values of the inventory follow:

November 1, 2021- P500,000

December 31, 2021- P900,000

February 15, 2022- P820,000

How much is the dividend income to be recognized in 2021?

Q4. On January 1, 2022, Samantha Corp owns 15,000 ordinary shares representing 15% of the shares outstanding of Berns Corporation. The ordinary shares were acquired on November 12, 2021 at a cost of P750,000 and have a fair value of P800,000 on December 31, 2021. On January 2, 2022, Samantha sold half of its investment for P50 per share incurring a brokerage and commission expense of P10,000.

How much is the gain on sale on January 2, 2022?

Q5. On October 1, 2021, Berns Company has a building with a cost of P4,000,000 and accumulated depreciation of P3,100,000. The company commits to a plan to sell the building by Feb. 1, 2022. On October 1, 2021, the building has an estimated selling price of P800,000 and it estimated that selling costs associated with the disposal of the building will be P120,000. On December 31, 2021, the estimated selling price of the building has increased to P1,200,000 with estimated selling costs remaining at P120,000.

What amount of loss should Berns Company recognize at the time the building was reclassified as held for sale?

Reference no: EM133181001

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