. Regine, Inc. owns 500 ordinary shares of Velasquez Company which has several hundred thousand shares publicly traded. These 500 shares were purchased by Regine in early part of 2021 for P200 per share. On August 20, 2021, Velasquez distributed 500 rights to Regine. Regine was entitled to buy one new share of Velasquez ordinary shares at P180 and two share rights. On September 1, 2021, when the market value of Velasquez ordinary share was P203, Regine exercised all the rights and received 250 ordinary shares.   - How much is the investment income recognized by Regine Inc. upon exercise of the rights? A. P11,500 B. P5,750 C. P750

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
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G. Regine, Inc. owns 500 ordinary shares of Velasquez Company which has several hundred thousand shares publicly traded. These 500 shares were purchased by Regine in early part of 2021 for P200 per share. On August 20, 2021, Velasquez distributed 500 rights to Regine. Regine was entitled to buy one new share of Velasquez ordinary shares at P180 and two share rights. On September 1, 2021, when the market value of Velasquez ordinary share was P203, Regine exercised all the rights and received 250 ordinary shares.
 
- How much is the investment income recognized by Regine Inc. upon exercise of the rights?
A. P11,500
B. P5,750
C. P750
D. P0
 
 
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