Problem 17-17 (IAA) At the beginning of current year, Marie Compa purchased 40% of the outstanding ordinary shares amount of the net assets of Lester equaled P5,000,000 The difference was attributed to equipment which had carrying amount of P1,200,000 and a fair value P2,000,000, and to building with a carrying amount os P1,000,000 and a fair value of P1,600,000. The remaining useful life of the equipment and building was 4 years and 12 years, respectively. During the current year, Lester Company reported net income of P1,600,000 and paid cash dividend of P1,000,000. 1. What amount should be recognized as excess of acquisition cost over carrying amount? a. 560,00 b. 320,000 c. 240,000 d. 0. 2. What amount should be reported as investment income for the current year? a. 640,000 b. 540,000 c. 560,000 d. 500,000 3. What is the carrying amount of the investment in associate at year-end? a. 2,550,000 b. 2,700,000 c. 2,800,000 d. 3,050,000
Problem 17-17 (IAA) At the beginning of current year, Marie Compa purchased 40% of the outstanding ordinary shares amount of the net assets of Lester equaled P5,000,000 The difference was attributed to equipment which had carrying amount of P1,200,000 and a fair value P2,000,000, and to building with a carrying amount os P1,000,000 and a fair value of P1,600,000. The remaining useful life of the equipment and building was 4 years and 12 years, respectively. During the current year, Lester Company reported net income of P1,600,000 and paid cash dividend of P1,000,000. 1. What amount should be recognized as excess of acquisition cost over carrying amount? a. 560,00 b. 320,000 c. 240,000 d. 0. 2. What amount should be reported as investment income for the current year? a. 640,000 b. 540,000 c. 560,000 d. 500,000 3. What is the carrying amount of the investment in associate at year-end? a. 2,550,000 b. 2,700,000 c. 2,800,000 d. 3,050,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Please help me answer no. 1, 2 and 3 with complete solutions please
Transcribed Image Text:Problem 17-17 (IAA)
At the beginning of current year, Marie Compa
purchased 40% of the outstanding ordinary shares
amount of the net assets of Lester equaled P5,000,000
The difference was attributed to equipment which had
carrying amount of P1,200,000 and a fair value
P2,000,000, and to building with a carrying amount os
P1,000,000 and a fair value of P1,600,000.
The remaining useful life of the equipment and building
was 4 years and 12 years, respectively.
During the current year, Lester Company reported net
income of P1,600,000 and paid cash dividend of P1,000,000.
1. What amount should be recognized as excess of
acquisition cost over carrying amount?
a. 560,00
b. 320,000
c. 240,000
d.
0.
2. What amount should be reported as investment income
for the current year?
a. 640,000
b. 540,000
c. 560,000
d. 500,000
3. What is the carrying amount of the investment in
associate at year-end?
a. 2,550,000
b. 2,700,000
c. 2,800,000
d. 3,050,000
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