On January 1, 2021, PARKER Corp. acquired 40% of the outstanding ordinary shares of OSBORN Corp. for ₱ 6,500,000. The carrying amount of net assets of OSBORN Corp. equaled ₱ 12,500,000. Any excess of cost over carrying amount is attributable to equipment with remaining useful life of 10 years. During the year, OSBORN reported net loss of ₱ 4,000,000 and paid dividends of ₱ 2,500,000. Required: A. Prepare journal entries for the current year. B. Compute for the carrying amount of the investment at year-end.
On January 1, 2021, PARKER Corp. acquired 40% of the outstanding ordinary shares of OSBORN Corp. for ₱ 6,500,000. The carrying amount of net assets of OSBORN Corp. equaled ₱ 12,500,000. Any excess of cost over carrying amount is attributable to equipment with remaining useful life of 10 years. During the year, OSBORN reported net loss of ₱ 4,000,000 and paid dividends of ₱ 2,500,000. Required: A. Prepare journal entries for the current year. B. Compute for the carrying amount of the investment at year-end.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, PARKER Corp. acquired 40% of the outstanding ordinary shares of
OSBORN Corp. for ₱ 6,500,000. The carrying amount of net assets of OSBORN Corp.
equaled ₱ 12,500,000. Any excess of cost over carrying amount is attributable to equipment
with remaining useful life of 10 years. During the year, OSBORN reported net loss of ₱
4,000,000 and paid dividends of ₱ 2,500,000.
Required:
A. Prepare
B. Compute for the carrying amount of the investment at year-end.
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