. Prepare the necessary journal entries to record the above transactions.
ROBLEM 31
Cobarrubias Corporation had the following investment at FVTPL at the beginning of the current year:
Fair Value
ABC Corporation, 10,000 shares (originally cost P1,000,000) - P1,200,000
JKL Company, 20,000 shares (originally cost P500,000) - 450,000
During the current year, the following transactions occurred:
Feb. 28 ABC Corporation declared a 3-for-2 share split.
Apr 31 JKL Company declared a 20% share dividend. The market value of JKL Company on this date is P3.00
June 30 Sold 5,000 shares of JKL Company for P100,000, less brokers fee of P1,000.
July 31 Sold 5,000 shares of ABC Corporation for P135.
Sept 30 Received share rights to purchase one share of ABC Corporation for P100 per share. The company should tender five rights for every share acquired. The market price of ABC Corporation shares on this date is P140.
Oct. 31 Exercise all the share rights from ABC Corporation.
Dec. 31 The market value of the portfolio:
ABC Corporation – P155 per share
JKL Company – P36 per share
Requirements:
1. Prepare the necessary
2. How much is the carrying value of the investment at year-end?
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