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On July 1, 2020, Matcha, Inc. acquired as a long-term investment for P1,600,000, a 40% interest in Milk Tea Company when the fair value of Milk Tea’s net assets was P4,000,000.  Due to the COVID-19 pandemic, Milk Tea Company experienced difficulty in continuing its business and reported the following net losses: 2020- P1,000,000 2021- P1,400,000 2022- P1,800,000 2023- P800,000 What amount should be reported as share in loss from investment in associate for the year 2023? a. P320,000 b. P280,000 c. P120,000 d. P80,000

On July 1, 2020, Matcha, Inc. acquired as a long-term investment for P1,600,000, a 40% interest in Milk Tea Company when the fair value of Milk Tea’s net assets was P4,000,000.  Due to the COVID-19 pandemic, Milk Tea Company experienced difficulty in continuing its business and reported the following net losses: 2020- P1,000,000 2021- P1,400,000 2022- P1,800,000 2023- P800,000 What amount should be reported as share in loss from investment in associate for the year 2023? a. P320,000 b. P280,000 c. P120,000 d. P80,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2020, Matcha, Inc. acquired as a long-term investment for P1,600,000, a 40% interest in Milk Tea Company when the fair value of Milk Tea’s net assets was P4,000,000.  Due to the COVID-19 pandemic, Milk Tea Company experienced difficulty in continuing its business and reported the following net losses:

  • 2020- P1,000,000
  • 2021- P1,400,000
  • 2022- P1,800,000
  • 2023- P800,000


What amount should be reported as share in loss from investment in associate for the year 2023?

a. P320,000
b. P280,000
c. P120,000
d. P80,000
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