On January 1, 2021, Flesh-n-Bone Corporation acquired 30% of Doug Corporation's 200,000 outstanding shares at P50 per share. Doug's net assets had a book value on the same date at P8,200,000. On the acquisition date, the following assets were deemed understated: Building having a remaining useful life of 20 years was understated by P1,500,000. Equipment having a remaining life of 10 years was understated by P500,000. Doug reported net income for the year at P2,000,000 and paid cash dividends of P10 per share by December 31. 20. How much investment income should be reported in Flesh-n-Bone Corporation's profit or loss for 2021? a. 600,000 b. 577,500 c. 622,500 d. 562,500 21. What is the carrying amount of the investment in Doug as of December 31, 2021? a. 3,562,500 b. 3,000,000 3.622.500

On January 1, 2021, Flesh-n-Bone Corporation acquired 30% of Doug Corporation's 200,000 outstanding shares at P50 per share. Doug's net assets had a book value on the same date at P8,200,000. On the acquisition date, the following assets were deemed understated: Building having a remaining useful life of 20 years was understated by P1,500,000. Equipment having a remaining life of 10 years was understated by P500,000. Doug reported net income for the year at P2,000,000 and paid cash dividends of P10 per share by December 31. 20. How much investment income should be reported in Flesh-n-Bone Corporation's profit or loss for 2021? a. 600,000 b. 577,500 c. 622,500 d. 562,500 21. What is the carrying amount of the investment in Doug as of December 31, 2021? a. 3,562,500 b. 3,000,000 3.622.500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Question

On January 1, 2021, Flesh-n-Bone Corporation acquired 30% of Doug Corporation's 200,000 outstanding
shares at P50 per share. Doug's net assets had a book value on the same date at P8,200,000. On the
acquisition date, the following assets were deemed understated:
Building having a remaining useful life of 20 years was understated by P1,500,000.
Equipment having a remaining life of 10 years was understated by P500,000. Doug reported net income
for the year at P2,000,000 and paid cash dividends of P10 per share by December 31.
20. How much investment income should be reported in Flesh-n-Bone Corporation's profit or loss for
2021?
a. 600,000
b. 577,500
c. 622,500
d. 562,500
21. What is the carrying amount of the investment in Doug as of December 31, 2021?
a. 3,562,500
b. 3,000,000
c. 3,622,500
d. 3,022,500
The answer for number 20 is Letter C and for number 21 is Letter D.
Please provide the solution for the two items showing the correct answers above.

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