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What is the gain on the sale of shares under fifo approach

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Reference no: EM132893391

During 2019, Lawan Company bought the shares of Burwood Company.

June 1

20,000 shares at P100

P2,000,000

December 1

30,000 shares at P120

3,600,000

Transactions for 2020:

January 10 Received 20% share dividend.

July 20 Received cash dividend of P10 per share. December 10 Sold 30,000 shares at P125 per share.

Question 1. What amount should be reported as dividend income for 2020?

a. P600,000

b. P500,000

c. P400,000

d. 300,000

Question 2. What is the gain on the sale of shares under FIFO approach?

a. P1,150,000

b. P950,000

c. P150,000

d. P550,000

Question 3. What is the gain on the sale of shares under average approach?

a. P390,000

b. P950,000

c. P500,000

d. P600,000

Reference no: EM132893391

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