On January 1, 2020, Sprite Company acquired 25% of the ordinary shares that carry voting rights at a general meeting of shareholders of Pepsi Company for P400,000.The purchase price is equal to the fair value of the 25% of Pepsi's identifiable assets less 25% of its identifiable liabilities. For the year ended 2020, Pepsi Company recognized a loss of P2,400,000. Sprite Company has no constructive or legal obligation in respect of its associate and has made no payment on its behalf. For the year ended 2021, Pepsi Company recognized a profit of P3,200,000. What is the carrying value of Sprite investment in Pepsi as of December 31, 2021? A.P400,000 B.None C.P800,000 D.P600,000
On January 1, 2020, Sprite Company acquired 25% of the ordinary shares that carry voting rights at a general meeting of shareholders of Pepsi Company for P400,000.The purchase price is equal to the fair value of the 25% of Pepsi's identifiable assets less 25% of its identifiable liabilities. For the year ended 2020, Pepsi Company recognized a loss of P2,400,000. Sprite Company has no constructive or legal obligation in respect of its associate and has made no payment on its behalf. For the year ended 2021, Pepsi Company recognized a profit of P3,200,000. What is the carrying value of Sprite investment in Pepsi as of December 31, 2021? A.P400,000 B.None C.P800,000 D.P600,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, Sprite Company acquired 25% of the ordinary shares that carry voting rights at a general meeting of shareholders of Pepsi Company for P400,000.The purchase price is equal to the fair value of the 25% of Pepsi's identifiable assets less 25% of its identifiable liabilities. For the year ended 2020, Pepsi Company recognized a loss of P2,400,000. Sprite Company has no constructive or legal obligation in respect of its associate and has made no payment on its behalf. For the year ended 2021, Pepsi Company recognized a profit of P3,200,000. What is the carrying value of Sprite investment in Pepsi as of December 31, 2021?
A.P400,000
B.None
C.P800,000
D.P600,000
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