or numbers 1 to 11, identify how much to add or deduct from the Investment in Associate account of ABC based on the following transactions or events: 1. Dec. 1, 2020 ‐ Bought 3,000 X Corp. shares at P200 per share. The total ordinary shares outstanding of X is 100,000 and each had a par value of P150. 2. Jan. 1, 2021 ‐ Bought an additional 15,000 shares of X Corp. for a total price of P3,800,000. The original shares are valued at P250 each. On the same date, ABC started providing essential technical information to X and that both corporations have an interchange of managerial personnel. Significant influence is established. There were no changes in the ordinary shares outstanding. 3. Net income reported for the year by the associate was P2,500,000. 4. Dividends declared by X is P2,000,000. It has 90,000 6%, P100‐par value preference shares outstanding which are cumulative and participating. No dividends were declared in the previous year. 5. As of Jan. 1, 2021, the fair value of the inventory of X was P100,000 higher than its carrying value. All of the inventory were sold as of the end of the year. 6. The fair value of an equipment held by X is P500,000 while its carrying value is P360,000 as of the beginning of the year. It has a remaining useful life of 3 years as of Dec. 31, 2021. 7. X sold inventories costing P150,000 to ABC for P200,000. Only 75% of these inventories were sold by ABC to third parties as of the end of the year. 8. Actuarial gains for the year totaled P400,000. 9. Share of ABC in the unrealized Holding Loss through OCI by X amounted to P300,000. 10. Jan. 1, 2022 ‐ Upon mutual agreement on ending the provision of technical information and managerial personnel, ABC lost significant influence over X. ABC subsequently sold 17,000 shares for P3,515,000. 11. The remaining shares were valued at P300 per share.
For numbers 1 to 11, identify how much to add or deduct from the
Investment in Associate account of ABC based on the following
transactions or events:
1. Dec. 1, 2020 ‐ Bought 3,000 X Corp. shares at P200 per
share. The total ordinary shares outstanding of X is 100,000
and each had a par value of P150.
2. Jan. 1, 2021 ‐ Bought an additional 15,000 shares of X Corp.
for a total price of P3,800,000. The original shares are
valued at P250 each. On the same date, ABC started
providing essential technical information to X and that both
corporations have an interchange of managerial personnel.
Significant influence is established. There were no changes
in the ordinary shares outstanding.
3. Net income reported for the year by the associate was
P2,500,000.
4. Dividends declared by X is P2,000,000. It has 90,000 6%,
P100‐par value
cumulative and participating. No dividends were declared in
the previous year.
5. As of Jan. 1, 2021, the fair value of the inventory of X was
P100,000 higher than its carrying value. All of the inventory
were sold as of the end of the year.
6. The fair value of an equipment held by X is P500,000 while
its carrying value is P360,000 as of the beginning of the
year. It has a remaining useful life of 3 years as of Dec. 31,
2021.
7. X sold inventories costing P150,000 to ABC for P200,000.
Only 75% of these inventories were sold by ABC to third
parties as of the end of the year.
8. Actuarial gains for the year totaled P400,000.
9. Share of ABC in the unrealized Holding Loss through OCI by
X amounted to P300,000.
10. Jan. 1, 2022 ‐ Upon mutual agreement on ending the
provision of technical information and managerial
personnel, ABC lost significant influence over X. ABC
subsequently sold 17,000 shares for P3,515,000.
11. The remaining shares were valued at P300 per share.
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