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John Company purchased 20,000 shares of Paul Joint Venture for P3,360,000, representing a 20% stake. In 2014, Paul Joint Venture reported a net income of P2,100,000 and paid John Company a 10% stock dividend. In 2015, Paul Joint Venture reported a net loss of P4,200,000 and paid a P700,000 cash dividend to shareholders. John Company then sold 5,500 shares for P280 per share.

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78 views1 page

Acc 9

John Company purchased 20,000 shares of Paul Joint Venture for P3,360,000, representing a 20% stake. In 2014, Paul Joint Venture reported a net income of P2,100,000 and paid John Company a 10% stock dividend. In 2015, Paul Joint Venture reported a net loss of P4,200,000 and paid a P700,000 cash dividend to shareholders. John Company then sold 5,500 shares for P280 per share.

Uploaded by

Unknown 01
Copyright
© © All Rights Reserved
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John Company purchased 20,000 ordinary shares of Paul Joint Venture, Inc.

for
P3, 360,000 representing 20% interest in joint venture on January 1, 2014.
In 2014, Paul Joint Venture, Inc. reported a net income P2, 100,000. On
the same year, John Company Received a 10% stock dividend from Paul Joint
Venture, Inc. In 2015, Paul Joint Venture, Inc. reported a net loss of P4, 200, 000.
Paul Joint Venture, Inc. paid a cash dividend of P700, 000 to ordinary
shareholders on December 31, 2015. On December 31, 2015, John Company sold
5, 500 ordinary shares of Paul Joint Venture, Inc. at P280 per share.
1) The gain in sale if investment in joint venture is

a) 651,000
b) 630,000
c) 574,700
d) 562,100
a) Answer not given

2) The balance of

investment in

joint venture

after the sale

is a)

2,667,000
b) 2,646,000
c) 2,590,700
d) 2,578,100
e) Answer not given

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