ABC and XYZ (the parties) entered into an agreement to establish a separate vehicle (DEF) and share joint control over the separate vehicle. The assets and liabilities of DEF are considered as assets and liabilities of DEF and not the assets and liabilities of ABC and XYZ. Upon formation of DEF, DEF issued 70% of its shares equally to ABC and XYZ and the remaining 30% are issued to other investors. Summary transactions for the first two years of operations of DEF are as follows: 2022 2023 Proceeds from Issuance of shares P110,000,000 Revenues 12,000,000 16,000,000 Various costs and operating expenses 8.000.000 11.000.000 Dividends declared (to be paid in 2024) How much is the carrying amount of the investment in DEF to be presented in the books of ABC as of December 31, 2022 and 2023? What is the investment income for 2022 and 2023?
ABC and XYZ (the parties) entered into an agreement to establish a separate vehicle (DEF) and share joint control over the separate vehicle. The assets and liabilities of DEF are considered as assets and liabilities of DEF and not the assets and liabilities of ABC and XYZ. Upon formation of DEF, DEF issued 70% of its shares equally to ABC and XYZ and the remaining 30% are issued to other investors. Summary transactions for the first two years of operations of DEF are as follows: 2022 2023 Proceeds from Issuance of shares P110,000,000 Revenues 12,000,000 16,000,000 Various costs and operating expenses 8.000.000 11.000.000 Dividends declared (to be paid in 2024) How much is the carrying amount of the investment in DEF to be presented in the books of ABC as of December 31, 2022 and 2023? What is the investment income for 2022 and 2023?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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ABC and XYZ (the parties) entered into an agreement to establish a separate vehicle (DEF) and share joint control over the separate vehicle. The assets and liabilities of DEF are considered as assets and liabilities of DEF and not the assets and liabilities of ABC and XYZ.
Upon formation of DEF, DEF issued 70% of its shares equally to ABC and XYZ and the remaining 30% are issued to other investors.
Summary transactions for the first two years of operations of DEF are as follows:
2022
2023
Proceeds from Issuance of shares
P110,000,000
Revenues
12,000,000 16,000,000
Various costs and operating expenses
8.000.000 11.000.000
Dividends declared (to be paid in 2024)
How much is the carrying amount of the investment in DEF to be presented in the books of ABC as of December 31, 2022 and 2023?
What is the investment income for 2022 and 2023?
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