ed 40% interest in an associate, Alta - Company, for P5,000,000 on January 1, 2019. At the acquisition date, there were no differences between fair value and carrying amount of identifiable assets and liabilities. Alta Company reported net income of P2,000,000 for 2019 and P3,000,000 for 2020. On December 31, 2019 and 2020, Alta Company paid cash dividend of P800,000 and P1,000,000, respectively. a. On January 1, 2019, Alta Company sold
Problem 18-2 (IFRS)
Glorious Company acquired 40% interest in an associate, Alta - Company, for P5,000,000 on January 1, 2019.
At the acquisition date, there were no differences between fair value and carrying amount of identifiable assets and liabilities.
Alta Company reported net income of P2,000,000 for 2019 and P3,000,000 for 2020. On December 31, 2019 and 2020, Alta Company paid cash dividend of P800,000 and P1,000,000, respectively.
a. On January 1, 2019, Alta Company sold an equipment costing P500,000 to Glorious Company for P800,000. Glorious Company applies a 10% straight line
b. On July 1, 2020, Alta Company sold an equipment for P900,000 to Glorious Company. The carrying amount of the equipment is P500,000 at the time of sale.
The remaining life of the equipment is 5 years and Glorious Company uses the straight line depreciation.
c. On December 1, 2020, Alta Company sold an inventory to: Glorious Company for P2,800,000.
The inventory had a cost of P2,000,000 and was still on hand on December 31, 2020.
Required:
1. Determine the investor's share in the profit of the associate for 2019.
2 Determine the investor's share in the profit of the associate for 2020.
3. Prepare
4. Determine the carrying amount of the investment in associate on December 31, 2020.
Step by step
Solved in 2 steps
Determine the carrying amount of the investment in associate on December 31, 2020
by Bartleby Expert
