Choco Company's current receivables from affiliated companies at December 31, 20x5 are (1) a P150,000 cash advance to Candy Corporation (Choco owns 30% of the voting stock of Candy and accounts for the investment by the equity method), (2) a receivable of P520,000 from Cake Corporation for administrative and selling services (Cake is 100%-owned by Choco and is included in Choco's consolidated financial statements), and (3) a receivable of P400,000 from Wheat Corporation for merchandise sales on credit (Wheat is a 90%-owned, unconsolidated subsidiary of Choco accounted for by the equity method). In the current assets section of its December 31, 20x5 consolidated balance sheet, Choco should report accounts receivable from investee in the amount of: A. P360,000 В. Р310,000 С. Р 550,000 D. P1,70,000
Choco Company's current receivables from affiliated companies at December 31, 20x5 are (1) a P150,000 cash advance to Candy Corporation (Choco owns 30% of the voting stock of Candy and accounts for the investment by the equity method), (2) a receivable of P520,000 from Cake Corporation for administrative and selling services (Cake is 100%-owned by Choco and is included in Choco's consolidated financial statements), and (3) a receivable of P400,000 from Wheat Corporation for merchandise sales on credit (Wheat is a 90%-owned, unconsolidated subsidiary of Choco accounted for by the equity method). In the current assets section of its December 31, 20x5 consolidated balance sheet, Choco should report accounts receivable from investee in the amount of: A. P360,000 В. Р310,000 С. Р 550,000 D. P1,70,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Transcribed Image Text:Choco Company's current receivables from affiliated companies at December 31, 20x5 are (1) a
P150,000 cash advance to Candy Corporation (Choco owns 30% of the voting stock of Candy
and accounts for the investment by the equity method), (2) a receivable of P520,000 from Cake
Corporation for administrative and selling services (Cake is 100%-owned by Choco and is
included in Choco's consolidated financial statements), and (3) a receivable of P400,000 from
Wheat Corporation for merchandise sales on credit (Wheat is a 90%-owned, unconsolidated
subsidiary of Choco accounted for by the equity method). In the current assets section of its
December 31, 20x5 consolidated balance sheet, Choco should report accounts receivable from
investee in the amount of:
A. P360,000
В. Р310,000
С. Р 550,000
D. P1,70,000
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