Reference no: EM132630640

Stock Right

On June 15, 2018, Mars Company owns 10,000 shares with a cost of P700,000 of Moon Company's stocks. During the same period, Moon Company issued stock rights to existing shareholders. Mars received 10,000 stock rights entitling him to purchase 5,000 new shares at P80. The ordinary share was trading ex-rights at P80 a share and the rights had a market value of P20 per right.

Question 1: Assuming that the above information are FVTPL, the stock rights should be initially recognized at____.

Question 2: Assuming the above securities are FVTOCI, the stocks rights should be initially recognized at___.

Question 3: Assuming that the above securities are FVTPL, the cost of investment acquired through exercised of stocks should be_____.

Question 4: Assuming that the above securities are FVTOCI, the cost of the investment acquired through the exercise of stock rights should be___.