Focus company accounts for its 10% interest in Bee Company using the cost method. This investment was acquired for P 4,000,000 on January 1, 2021. On January 1, 2022, Focus acquired an additional 20% interest in Bee for P10,000,000. This acquisition cost was equal to the carrying amount of the net assets acquired. On the same date, the fair value of Bee's net assets equaled carrying amount. For the years ended December 31.2021 and 2022, Bee has declared dividends of P2,000,000 and 3,000,000 respectively. The investee has also reported a net income of P6,000,000 for year 2021 and P6,500,000 for year 2022. What is the carrying amount of the investment in associate on December 31, 2022?
Focus company accounts for its 10% interest in Bee Company using the cost method. This investment was acquired for P 4,000,000 on January 1, 2021. On January 1, 2022, Focus acquired an additional 20% interest in Bee for P10,000,000. This acquisition cost was equal to the carrying amount of the net assets acquired. On the same date, the fair value of Bee's net assets equaled carrying amount. For the years ended December 31.2021 and 2022, Bee has declared dividends of P2,000,000 and 3,000,000 respectively. The investee has also reported a net income of P6,000,000 for year 2021 and P6,500,000 for year 2022. What is the carrying amount of the investment in associate on December 31, 2022?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education