Reference no: EM132783015
Question - AQUA Corporation - AQUA Corporation purchased 60,000 shares of another entity for 4,200,000 during the beginning of 2020. Also during the year, the entity received 60,000 share rights from the investee. The share rights are not accounted for separately. and each right has a fair value of P70. Each right entitled the shareholder to acquire one share for P75. The market price of the investee's share was P95 immediately before the rights were issued and P85 immediately after the rights were issued. The entity exercised 40,000 of the total share rights during the year, 10,000 of the share rights were sold for P65 and the remaining 10,000 rights expired before the end of the year. At year-end, the entity sold 25,000 shares at P90 per share. The FIFO approach is used by AQUA.
Question 1: The entry to record the purchase of 60,000 shares at the beginning of 2020 includes a credit to cash amounting to?
Question 2: The entry to record the receipt of 60,000 share rights during the year includes a debit to share rights amounting to?
Question 3: The entry to record the sale of 10,000 share rights during the year includes a credit to investment in equity instruments amounting to?
Question 4: The entry to record the exercise of 40,000 share rights during the year includes a debit to investment in equity instruments amounting to?
Question 5: The entry to record the expiration of 10,000 share rights during the year includes a credit to share rights amounting to?
Question 6: What amount of gain on sale of investment should be recognized in the current year under FIFO method?
Question 7: What is the ending balance of the investment in equity instruments by the end of the current year under FIFO method?
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