ALPHA CORP. bought 40% of BETA INC.'s outstanding ordinary shares on January 2, 2015, for P4,000,000. The carrying amount of BETA’s net assets at the purchase date totaled P9,000,000. Fair values and carrying amounts were the same for all items except for plant and inventories, for which fair values exceeded their carrying amounts by P900,000 and P100,000, respectively. The plant has an 18-year life. All inventories were sold during 2015. During 2015, BETA reported profit of P1,200,000 and paid a P200,000 cash dividend. What amount should ALPHA report in its statement of comprehensive income from its investment in BETA for the year ended December 31, 2015?
ALPHA CORP. bought 40% of BETA INC.'s outstanding ordinary shares on January 2, 2015, for P4,000,000. The carrying amount of BETA’s net assets at the purchase date totaled P9,000,000. Fair values and carrying amounts were the same for all items except for plant and inventories, for which fair values exceeded their carrying amounts by P900,000 and P100,000, respectively. The plant has an 18-year life. All inventories were sold during 2015. During 2015, BETA reported profit of P1,200,000 and paid a P200,000 cash dividend. What amount should ALPHA report in its statement of comprehensive income from its investment in BETA for the year ended December 31, 2015?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
ALPHA CORP. bought 40% of BETA INC.'s outstanding ordinary shares on January 2, 2015, for P4,000,000. The carrying amount of BETA’s net assets at the purchase date totaled P9,000,000. Fair values and carrying amounts were the same for all items except for plant and inventories, for which fair values exceeded their carrying amounts by P900,000 and P100,000, respectively. The plant has an 18-year life. All inventories were sold during 2015. During 2015, BETA reported profit of P1,200,000 and paid a P200,000 cash dividend.
What amount should ALPHA report in its statement of comprehensive income from its investment in BETA for the year ended December 31, 2015?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education