Reference no: EM132974763
Question - Hey Company holds 90,000 shares of zumba Company for a total cost of P8,820,000 as of December 31, 2019. It received dividends from its ordinary share investments during the year 2020 as follows:
March 1: A property dividend from zumba Company for 20,000 shares of eater Company. On that date, the market value of zumba's share is P140 while eater's share is P112.
May 1: A cash dividend of P2,380,000 in lieu of 20% share dividend from zumba Company. On that date, the market value of zumba's share is P126.
July 1: 10,000 shares of Cheater Company in lieu of cash dividend of P56 per share. On that date, the market price of eater's share is P84.
Sept. 1: 10% share dividend from zumba Company.
On October 1, Hey Company sold 33,0000 shares of zumba Company for a total consideration of P3,920,000.
1. What total amount of dividend revenue should Hey report in its 2020 income statement?
a. P3,080,000 c. P2,640,000
b. P3,420,000 d. P3,120,000
2. What total amount of gain (loss) on sale to be recognized for 2020 in relation with the above transactions?
a. P1,650,000 c. P2,380,000
b. P2,520,000 d. P1,220,000
3. What is the total carrying amount of Hey Company's equity investments on December 31, 2020?
a. P7,980,0000 c. P7,320,000
b. P8,320,000 d. P8,660,000
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