At the beginning of the current year, an entity acquired 40% of the outstanding ordinary shares of another entity for P7,000,000 when the net assets of the investee amounted to P10,000,000. At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to fair value, except for land whose fair value was P2,000,000 greater than carrying amount and inventory whose fair value was P1,500,000 greater than cost. The land was sold in the current year and one-half of the inventory was sold during the current year. During the current year, the investee reported net income of P8,000,000, issued 10% share dividend and paid cash dividend on P2,500,000. What is the investment income for the current year? a. 3,200,000 b. 2,100,000 c. 2,900,000 d. 2,400,000 What is the carrying amount of the investment in associate at year-end? a. 8,900,000 b. 8,100,000 c. 9,200,000 d. 8,400,000
At the beginning of the current year, an entity acquired 40% of the outstanding ordinary shares of another entity for P7,000,000 when the net assets of the investee amounted to P10,000,000. At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to fair value, except for land whose fair value was P2,000,000 greater than carrying amount and inventory whose fair value was P1,500,000 greater than cost.
The land was sold in the current year and one-half of the inventory was sold during the current year. During the current year, the investee reported net income of P8,000,000, issued 10% share dividend and paid cash dividend on P2,500,000.
What is the investment income for the current year?
a. 3,200,000 b. 2,100,000 c. 2,900,000 d. 2,400,000
What is the carrying amount of the investment in associate at year-end?
a. 8,900,000 b. 8,100,000 c. 9,200,000 d. 8,400,000
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