What total cost be recorded for new shares for temporal co

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Reference no: EM132817006

Temporal Company owned 50,000 shares held for trading. These 50,000 shares were purchased for P 120 per share. During the year, the investee distributed 50,000 share rights to the investor.

The investor was entitled to buy one new share for P 90 cash and two of these rights.
Each share had a market value of P 130 and each right had a market value of P 20 on the date of issue

Question 1: What total cost should be recorded for the new shares that are acquired by exercising the rights?

A. P 2,250,000

B. P 3,250,000

C. P 3,050,000

D. P 5,500,000

Reference no: EM132817006

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