Malay, Inc., a Philippine company, acquired 100 percent common stock of an Indian company on January 1, 2020, for P402,000. The Indian subsidiary’s net assets amounted to 300,000 rupees on the date of acquisition.
Malay, Inc., a Philippine company, acquired 100 percent common stock of an Indian company
on January 1, 2020, for P402,000. The Indian subsidiary’s net assets amounted to 300,000
rupees on the date of acquisition. On January 1, 2020, the book values of its identifiable
assets and liabilities approximated their fair values. On December 31, 2020, the Indian
subsidiary’s adjusted
debits than credits. The Indian subsidiary reported income of P25,000 rupees for 2020 and
paid a cash dividend of 5,000 rupees on November 30, 2020. Included on the Indian
subsidiary’s income statement was
basic equity method of accounting for its investment in the Indian subsidiary and determined
that
Exchange rate at various dates during 2020 are as follows:
January 1 1 rupee = P1.20
November 30 1 rupee = P1.30
December 31 1 rupee = P1.32
Average for 2020 1 rupee = P1.24
1. What amount should Malay record as “income from subsidiary” based on Indian subsidiary’s
reported comprehensive income?
2. The receipt of dividend will result in a credit/debit account to Investment Account/Income
from subsidiary account:
3. On Malay’s consolidated
should be reported for the goodwill acquired on January 1, 2020?
4. In the
31, 2020, Malay should report the translation adjustment as a component of other
comprehensive income of:
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