Market value per tax Independent

declaration Zonal valuation appraiser

P2,500,000 P5,000,000 P6,000,000

The adjusted net asset of M corporation would be:

Fair value of assets:
Fair value of assets P10,000,000
Adjustment increase
real property (P6M - P2M) 4,000,000 14,000,000
Less: Fair value of liabilities 6,000,000
Adjusted net asset values P 8,000,000
Divided by outstanding shares 5,000
Adjusted value per share of stock P 1,600

Unidentifiable Shares of Stocks

If the shares of stocks cannot be properly identified, the following

rules are applicable to compute the cost of the shares of stocks:

1. The cost to be assigned shall be on the basis of the first-In,

first-Out (FIFO) method;
2. If the seller maintains the books of accounts where every
transaction of a particular stock is recorded, the moving
average is to be used; and
3. If the stock dividends are received, an allocated cost of the
original cost shall be assigned to the said stock dividends.

Illustration 1 - Without stock dividends

Assume the following investment transactions in the books of

accounts of Sara Lee in the common shares of stock of PNB:

October 20, 200A Purchased 50 shares at P120 per share

May 10, 200B Purchased 50 shares at P140 per share
September 3, 200B Sold 75 shares directly to a buyer at P150 per share

FIFO Method. If the FIFO method were used, the computation of

capital gain on sale of investment in stock would be

Selling price (P150 x 75) P11,250

Less: Cost of shares sold:
October purchase (P120 x 50 shares) P6,000
May purchase (P140 x 25 shares) 3,500 9,500
Capital gain on sale of investment in stocks P1,750