On October 1, 2021, SIKAP Corporation owns 10,000 shares acquired at a cost of P120,000 classified as FVOCI. The shares represent 10% of the shares outstanding of TIYAGA Corporation. On the same date, TIYAGA declared cash dividends on its ordinary shares payable to its shareholders on October 31. However, on October 31, TIYAGA Corporation issued 1 share for every 4 shares held by the shareholders in lieu of the supposed cash dividends previously declared. The stocks were selling at that time at P21 per share. a. How much is the dividend income to be recognized in 2021? b. Prepare all the necessary entries during the year.
On October 1, 2021, SIKAP Corporation owns 10,000 shares acquired at a cost of P120,000 classified as FVOCI. The shares represent 10% of the shares outstanding of TIYAGA Corporation. On the same date, TIYAGA declared cash dividends on its ordinary shares payable to its shareholders on October 31. However, on October 31, TIYAGA Corporation issued 1 share for every 4 shares held by the shareholders in lieu of the supposed cash dividends previously declared. The stocks were selling at that time at P21 per share. a. How much is the dividend income to be recognized in 2021? b. Prepare all the necessary entries during the year.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On October 1, 2021, SIKAP Corporation owns 10,000 shares acquired at a cost of P120,000 classified as
FVOCI. The shares represent 10% of the shares outstanding of TIYAGA Corporation. On the same date,
TIYAGA declared cash dividends on its ordinary shares payable to its shareholders on October 31.
However, on October 31, TIYAGA Corporation issued 1 share for every 4 shares held by the shareholders
in lieu of the supposed cash dividends previously declared. The stocks were selling at that time at P21 per
share.
a. How much is the dividend income to be recognized in 2021?
b. Prepare all the necessary entries during the year.
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