Reference no: EM132630634

Liquidating Dividends

On January 2, 2018, Earth Company has 20,000 shares of P100 par value ordinary shares. The shares were acquired a year ago at a cost of P440,000. On February 14, of the current year, Earth Company received 15% cash, liquidating dividends from the Investee Corporation.

Question 1: Assuming that the Investee Corporation is a wasting asset corporation and partial liquidation, how much is the amount of loss on liquidation to be recognized in 2018?

Question 2: Assuming that the Investee Corporation is a wasting asset corporation and partial liquidation, provide the relevant entries.

Question 3: Assuming that the Investee Corporation is other than a wasting asset corporation, how much is the amount of loss on liquidation to be recognized in 2018?

Question 4: Assuming that the Investee Corporation is other than a wasting asset corporation and partial liquidation, provide the relevant entries.