On January 1 2020, Philippine Airlines purchased 20% of Cebu Pacific's total outstanding ordinary shares for two tenths of a billion peos. Net assets of the investee were fairly valued except for one of its BUILDINGS, has a fair value of P5,000,000 greater than its carrying amount. The total carrying amount of all assets is P900,00,000. Assuming the building still has a remaining life of 10 years, how much “INVESTMENT INCOME” is debited to amortize the excess of cost for the year 2020?
On January 1 2020, Philippine Airlines purchased 20% of Cebu Pacific's total outstanding ordinary shares for two tenths of a billion peos. Net assets of the investee were fairly valued except for one of its BUILDINGS, has a fair value of P5,000,000 greater than its carrying amount. The total carrying amount of all assets is P900,00,000. Assuming the building still has a remaining life of 10 years, how much “INVESTMENT INCOME” is debited to amortize the excess of cost for the year 2020?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1 2020, Philippine Airlines purchased 20% of Cebu Pacific's total outstanding
ordinary shares for two tenths of a billion peos. Net assets of the investee were fairly valued
except for one of its BUILDINGS, has a fair value of P5,000,000 greater than its carrying
amount. The total carrying amount of all assets is P900,00,000.
Assuming the building still has a remaining life of 10 years, how much “INVESTMENT
INCOME” is debited to amortize the excess of cost for the year 2020?
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