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What amount of gain on sale of investment be recognized

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Reference no: EM132791822

At the beginning of the current year, Switzerland Company purchase 50,000 shares of another entity for P3,800,000. During the year, the entity received 50,000 shares rights from the investee. The share rights are not accounted for separately. Each right entitled the shareholder to acquire one share for P80.The market price of the investee's share was P100 immediately before the right were issued and P90 immediately after the rights were issued. The entity exercised all share rights during the year. At year-end, the entity sold 25,000 shares at P90 per share. The FIFO approach is used.

Problem 1: What amount of gain on sale of investment should be recognized in the current year?

Reference no: EM132791822

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