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Thursday, August 12, 2010

Valix Finacc vol 1 Problem 10-6

Financial Accounting Volume 1 2008 Valix-Peralta
Chapter 1 Problem 10-6



1. Investment in ANA ordinary shares                                                    300,000
      Cash                                                                                                                   300,000

2. Investment in Benguet ordinary shares                                              120,000
      Dividend income (2,000 x 60)                                                                             120,000

3. Investment in ANA ordinary shares                                                    420,000
      Cash                                                                                                                   420,000    

4. Cash                                                                                                    60,000
      Dividend income (12% x P200 = 24 x 5,000 x 1/2)                                                   60,000


                                                                                                          131

5. Memo – Received 20,000 new ANA ordinary shares as a
                result of a 2 for 1 split of 10,000 original shares.

6. Cash (680,000 – 34,000)                                                                      646,000
       Investment in ANA ordinary shares (8,000/20,000 x 720,000)                              288,000 
       Gain on sale of investment                                                                               358,000

 

                                                                                                                                                        Shares          Cost

  SMC preference share                                                                          5,000        1,200,000
  Benguet ordinary share                                                                      10,000        1,000,000
  Benguet ordinary share                                                                       2,000           120,000
  ANA ordinary share                                                                            12,000           432,000
                                                                                                             29,000        2,752,000

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