6. In January 2002, Henry Corporation acquired 20 percent of the outstanding ordinary shares of Davis Company for P1,120,000. This investment gave Henry the ability to exercise significant influence over Davis. The book value of the acquired shares was P840,000. The excess of cost over book value was attributed to an identifiable intangible asset that was undervalued on Davis' balance sheet and that had a remaining useful life of ten years. For the year ended December 31, 2002, Davis reported profit of P252,000 and paid cash dividends of P56,000 on its ordinary shares. What is the proper carrying amount of Henry's investment in Davis at December 31, 2002? a. 1,080,800 (Adapted) b. 1,092,000 c. 1,131,200 d. 1,181,600

6. In January 2002, Henry Corporation acquired 20 percent of the outstanding ordinary shares of Davis Company for P1,120,000. This investment gave Henry the ability to exercise significant influence over Davis. The book value of the acquired shares was P840,000. The excess of cost over book value was attributed to an identifiable intangible asset that was undervalued on Davis' balance sheet and that had a remaining useful life of ten years. For the year ended December 31, 2002, Davis reported profit of P252,000 and paid cash dividends of P56,000 on its ordinary shares. What is the proper carrying amount of Henry's investment in Davis at December 31, 2002? a. 1,080,800 (Adapted) b. 1,092,000 c. 1,131,200 d. 1,181,600

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

6. In January 2002, Henry Corporation acquired 20 percent of the
outstanding ordinary shares of Davis Company for P1,120,000.
This investment gave Henry the ability to exercise significant
influence over Davis. The book value of the acquired shares
was P840,000. The excess of cost over book value was
attributed to
an identifiable intangible asset that was
undervalued on Davis' balance sheet and that had a remaining
useful life of ten years. For the year ended December 31, 2002,
Davis reported profit of P252,000 and paid cash dividends of
P56,000 on its ordinary shares. What is the proper carrying
amount of Henry's investment in Davis at December 31, 2002?
a. 1,080,800
(Adapted)
b. 1,092,000
c. 1,131,200
d. 1,181,600
7. On Januaru 1
2000

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