Assuming the excess of acquisition cost over the underlying equity acquired is attributable to a piece of equipment with a remaining life of 5 years on the date of investment acquisition, and depreciation on a straight line basis, what is the investment carrying amount at December 31,2020?
On March 31, 2020, Gray Company purchased 120,000 ordinary shares of Len Company for P 1,700,000, representing 30% of Len’s outstanding ordinary shares and an underlying equity of P1,400,000 in Len's net assets on January 2, 2020. The excess of the acquisition
On March 1, June 1. September 1 and December 1, all of 2020, Len paid quarterly dividend of P0.50 per ordinary share on each of these dates. Len's profit for the year ended December 31, 2020 was P1,200,000, that was earned evenly throughout the year. At December 31, 2020, each ordinary share of Len Company was selling at P16.
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