On April 1, 2019, BBB Company purchased 40% of the outstanding ordinary shares of Clarke Company for P10,000,000. On that date, Clarke's net assets were P20,000,000 and BBB cannot attribute the excess of the cost of its investment in Clarke over its equity in Clarke's net assets to any particular factor. The investee's net income for 2019 is P1,500,000. What amount should be reported as investment income for 2019?
On April 1, 2019, BBB Company purchased 40% of the outstanding ordinary shares of Clarke Company for P10,000,000. On that date, Clarke's net assets were P20,000,000 and BBB cannot attribute the excess of the cost of its investment in Clarke over its equity in Clarke's net assets to any particular factor. The investee's net income for 2019 is P1,500,000. What amount should be reported as investment income for 2019?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On April 1, 2019, BBB Company purchased 40% of the outstanding ordinary shares of Clarke Company for P10,000,000. On that date, Clarke's net assets were P20,000,000 and BBB cannot attribute the excess of the cost of its investment in Clarke over its equity in Clarke's net assets to any particular factor. The investee's net income for 2019 is P1,500,000. What amount should be reported as investment income for 2019?
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