On September 1, 2019, Eli Company purchased 35% of the outstanding ordinary shares of Long Corporation for P500,000. At that date, all the identifiable assets and liabilities of Long Corporation are measured at amounts equal to their fair values. During 2019, Long Corporation reported net income of P120,000. During 2020, because of the COVID-19 Pandemic, Long Corporation reported net loss of P1,800,000. During 2021, because of the partial recovery of the economy from the effects brought by COVID-19 Pandemic, Long Corporation reported net income of P400,000. 1. The amount to be reported as investment loss in 2020 is a. P514,000 b. P116,000 C. P542,000 d. P630,000 2. The amount to be reported as investment income in 2021 is a. P88,000 b. P24,000 C. P52,000 d. P140,000

On September 1, 2019, Eli Company purchased 35% of the outstanding ordinary shares of Long Corporation for P500,000. At that date, all the identifiable assets and liabilities of Long Corporation are measured at amounts equal to their fair values. During 2019, Long Corporation reported net income of P120,000. During 2020, because of the COVID-19 Pandemic, Long Corporation reported net loss of P1,800,000. During 2021, because of the partial recovery of the economy from the effects brought by COVID-19 Pandemic, Long Corporation reported net income of P400,000. 1. The amount to be reported as investment loss in 2020 is a. P514,000 b. P116,000 C. P542,000 d. P630,000 2. The amount to be reported as investment income in 2021 is a. P88,000 b. P24,000 C. P52,000 d. P140,000

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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