Reference no: EM132820017

Problem -

Q1. Grand Company has 60,000 ordinary shares of Brand Corporation as an investment in equity securities through other comprehensive income. These shares were acquired at fair value, which was P80 per share on May 2, 2919 plus transaction costs of 2% of the fair value. On December 31, 2919, the market value of these shares is P90 per share. Grand Company sold 42,000 shares of its investment in Brand Corporation on February 15, 2020 for P85 per share less 2.5% transaction costs on the selling price. What amount of realized gain or loss should Grand Company recognise in selling these shares?

Q2. Guess Corporation purchased 50,000 ordinary shares on January 2, 2019 to be held for trading. Guess received a share dividend of 15% on March 31, 2919 when the market price of the share is P40. On December 31, 2019, Guess paid a cash dividend of P8 per share. In December 91, 2019 Income Statement of Guess Corporation, what amount should be reported as Dividend Income?