On January 1, 2020, PQR Company purchased 40,000 shares of Frank, Inc. at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000 were also paid by PQR. A P5 dividend per share was declared by Frank, Inc. on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. What is the initial measurement of the investment in Frank, Inc.?

On January 1, 2020, PQR Company purchased 40,000 shares of Frank, Inc. at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000 were also paid by PQR. A P5 dividend per share was declared by Frank, Inc. on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. What is the initial measurement of the investment in Frank, Inc.?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 14RE

See similar textbooks

Similar questions

Fisafolia Corporation has gross income from operations of $210,000 and operating expenses of $160,000 for 2019. The corporation also has $30,000 in dividends from publicly traded domestic corporations in which the ownership percentage was 45 percent. Calculate the corporation's dividends received deduction for 2019. $_____________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $135,000. Calculate the corporation's dividends received deduction for 2019. $___________ Assume that instead of $210,000, Fisafolia Corporation has gross income from operations of $158,000. Calculate the corporation's dividends received deduction for 2019. $_____________
On January 1, 2019, Kittson Company had a retained earnings balance of 218,600. It is subject to a 30% corporate income tax rate. During 2019, Kittson earned net income of 67,000, and the following events occurred: 1. Cash dividends of 3 per share on 4,000 shares of common stock were declared and paid. 2. A small stock dividend was declared and issued. The dividend consisted of 600 shares of 10 par common stock. On the date of declaration, the market price of the companys common stock was 36 per share. 3. The company recalled and retired 500 shares of 100 par preferred stock. The call price was 125 per share; the stock had originally been issued for 110 per share. 4. The company discovered that it had erroneously recorded depreciation expense of 45,000 in 2018 for both financial reporting and income tax reporting. The correct depreciation for 2018 should have been 20,000. This is considered a material error. Required: 1. Prepare journal entries to record Items 1 through 4. 2. Prepare Kittsons statement of retained earnings for the year ended December 31, 2019.
Waseca Company had 5 convertible securities outstanding during all of 2019. It paid the appropriate interest (and amortized any related premium or discount using the straight line method) and dividends on each security during 2019. Each of the convertible securities is described in the following table: Additional data: Net income for 2019 totaled 119,460. The weighted average number of common shares outstanding during 2019 was 40,000 shares. No share options or warrants arc outstanding. The effective corporate income tax rate is 30%. Required: 1. Prepare a schedule that lists the impact of the assumed conversion of each convertible security on diluted earnings per share. 2. Prepare a ranking of the order in which each of the convertible securities should be included in diluted earnings per share. 3. Compute basic earnings per share. 4. Compute diluted earnings per share. 5. Indicate the amount(s) of the earnings per share that Waseca would report on its 2019 income statement.
During 2021, Anthony Company purchased debt securities as a long-term investment and classified them as trading. All securities were purchased at par value. Pertinent data are as follows: The net holding gain or loss included in Anthonys income statement for the year should be: a. 0 b. 3,000 gain c. 9,000 loss d. 12,000 loss
On January 1, 2020, Alice Company purchased 40,000 shares of Jasper at P100 per share. The investment is measured at fair value through other comprehensive income. Brokerage fees amounted to P120,000. A P5 dividend per share of Jasper had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. No other transactions occurred in 2020 affecting the investment in Jasper's share. What is the initial measurement of the investment?
On January 1, 2020, Lovely Company paid P1,200,000 for 40,000 ordinary shares of Lonely Corporation which represent 25% investment in the net assets of Lonely. Lovely has the ability to exercise significant influence over Lonely. Lovely received a dividend of P3 per share from Lonely in 2020. The reported profit of Lonely for the year ended December 31, 2020 was P640,000. The balance of Lovely’s investment in Lonely at December 31, 2020 should be a. 1,480,000 b. 1,360,000 c. 1,240,000 d. 1,200,000
6. On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities? Group of answer choices P280,000 P200,000 P400,000 P80,000
On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities? O P400,000 O P280,000 O P200.000 O P80,000
On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4.200.000. How much should be recognized in the 2020 other comprehensive income related to these securities? A. 80,000 B. 200,000 C. 280,000 D. 400,000
On January 2, 2020, Theodora Company purchased 40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities? O P280,000 O P200.000 O P80,000 C P400.000
On January 2, 2020, Theodora Company purchased40,000 shares of Byzantine, Inc. stock at P100 per share. Brokerage fees amounted to P120,000. A P5 dividend per share of Byzantine, Inc. shares had been declared on December 15, 2019, to be paid on March 31, 2020 to shareholders of record on January 31, 2020. The shares are designated as FVTOCI. On December 31, 2020 the investment has a fair value of P4,200,000. How much should be recognized in the 2020 other comprehensive income related to these securities?a. P400,000 c. P200,000b. P280,000 d. P 80,000
On June 1, 2020, Ping Corp. purchased 10,000 of Pong's 50,000 outstanding shares at a price of P6.00 per share. Pong had earnings of P3,000 per month during 2020 and paid dividends of P10,000 on March 1, 2020 and P12,500 on December 1, 2020. The fair value of Pong's shares was P6.50 per share on December 31, 2020. Which statement is correct? O Assuming that the investment is FVTPL, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P2,500 O Assuming that the investment is FVTOCI, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P7,500. O Assuming that the investment is an associate, the total effect on Ping's profit or loss for the year ended December 31, 2020 is P3,600. O After all closing entries for 2020 are completed, the effect of the increase in fair value on total shareholders' equity would be the same amount under the FVTOCI and FVTPL approaches.