Reference no: EM132901101
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 eater 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.
Problem 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
Problem 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
Problem 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