On January 1, 2016, MMC Company acquired 10% of the outstanding ordinary shares of AV Company for P4,000,000. On January 1, 2017, MMC gained the ability to exercise significant influence over financial and operating control of AV Company by acquiring additional 20% of AV’s outstanding ordinary shares for
On January 1, 2016, MMC Company acquired 10% of the outstanding ordinary shares of AV Company for P4,000,000. On January 1, 2017, MMC gained the ability to exercise significant influence over financial and operating control of AV Company by acquiring additional 20% of AV’s outstanding ordinary shares for P10,000,000.
The fair value of AV’s net assets equalled carrying amount. The fair value of the 10% interest on January 1, 2017 was P6,000,000. Other information:
2016 2017
Dividend paid 2,000,000 3,000,000
Net income 6,000,000 6,500,000
Compute for the carrying amount of investment in associate.
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