2. On July 1, 2021, Mickaella Company, an SME, acquired 20% of the outstanding ordinary shares ofanother entity for P5,000,000. The book value of the acquired share was P4,000,000. The excess ofcost over book value was attributable to an identifiable intangible asset which was undervalued onthe investee's statement of financial position and which had a remaining useful life of 5 years. For theyear ended December 31, 2021, the investee reported net income of P6,000,000 and paid cashdividends of P1,000,000 on its ordinary share capital and issued 10% share dividend on December 31,2021. The entity elected to use the equity method in accounting for this investment.What is the carrying value of the investment in associate at December 31, 2021?

It is the method used to treat investments in associate companies. This method is used when an…

Answered: On July 1, 2021, Mickaella Company, an…

On July 1, 2021, Mickaella Company, an SME, acquired 20% of the outstanding ordinary shares of another entity for P5,000,000. The book value of the acquired share was P4,000,000. The excess of

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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