Prepare the necessary journal entries on the books of enif

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Reference no: EM133264867

FA-FVPL; Cash and Share Dividends

At the beginning of 2019, Enif Co. purchased 100,000 of Cetus Co.'s ordinary shares for P3,000,000.

The entity designated the investment as financial asset at fair value through profit or loss.

On June 30, 2019, Cetus declared a P1.50 cash dividend to all of its shareholders of record as of July 31, to be distributed on August 31.
On September 15, Enif sold 20,000 shares of its investment in Cetus, receiving P650,000.

At the end of 2019, Cetus's shares had a fair value of P31 per share.

Question 1. Prepare the necessary entries on the books of Enif.

Question 2. Suppose that instead of declaring cash dividends, Cetus declared a 20% share dividend. Prepare the necessary journal entries on the books of Enif.

Reference no: EM133264867

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