At the beginning of the current year, FFF Company acquired 20% of the outstanding ordinary shares of Vee Company for P8,000,000. This investment gave FFF the ability to exercise significant influence over Vee. The carrying amount of the acquired shares was P6,000,000. The excess of cost over carrying amount was attributed to a depreciable asset which was undervalued on Vee's statement of financial position and which had a remaining useful life of 10 years. The investee reported net income of P1,800,000 and paid cash dividends of P400,000 and thereafter issued 5% share dividend during the current year. What is the carrying amount of the investment in associate at year-end?
At the beginning of the current year, FFF Company acquired 20% of the outstanding ordinary shares of Vee Company for P8,000,000. This investment gave FFF the ability to exercise significant influence over Vee. The carrying amount of the acquired shares was P6,000,000. The excess of cost over carrying amount was attributed to a depreciable asset which was undervalued on Vee's statement of financial position and which had a remaining useful life of 10 years. The investee reported net income of P1,800,000 and paid cash dividends of P400,000 and thereafter issued 5% share dividend during the current year. What is the carrying amount of the investment in associate at year-end?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the beginning of the current year, FFF Company acquired 20% of the outstanding ordinary shares of Vee Company for P8,000,000. This investment gave FFF the ability to exercise significant influence over Vee. The carrying amount of the acquired shares was P6,000,000. The excess of cost over carrying amount was attributed to a depreciable asset which was undervalued on Vee's
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