At the beginning of the current year, an entity acquired 40% of the ordinary shares of an associate. On such date, assets and liabilities of the investee were recorded at fair value and the acquisition showed that goodwill of P1,000,000 was acquired. The investee reported net income of P8,000,000 for the current year. In December, the investee sold inventory costing P3,000,000 to the investor for P5,000,000. The inventory remained unsold by the investor at year-end. At the beginning of the current year, the investee sold equipment to the investor with a carrying amount of P2,500,000 for P4,000,000. The remaining life of the equipment is 5 years. What amount of investment income should be reported for the current year? a. 1,920,000 b. 1,800,000 c. 3,200,000 d. 2,400,000 Problem 4 An entity owned 100% of another entity’s preference shares and 20% of ordinary shares. The investee’s share capital outstanding at year-end included P5,000,000 of 10% cumulative preference shares and P10,000,000 of ordinary shares. The investee reported net income of P8,000,000 for the current year. No dividend was declared for both preference and ordinary shares during the current year. What amount should be reported as investment income for the current year? a. 1,600,000 b. 1,500,000 c. 2,000,000 d. 1,000,000
At the beginning of the current year, an entity acquired 40% of the ordinary shares of an associate. On such date, assets and liabilities of the investee were recorded at fair value and the acquisition showed that
What amount of investment income should be reported for the current year?
a. 1,920,000 b. 1,800,000 c. 3,200,000 d. 2,400,000
Problem 4
An entity owned 100% of another entity’s
What amount should be reported as investment income for the current year?
a. 1,600,000 b. 1,500,000 c. 2,000,000 d. 1,000,000
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