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P200,000 and declares no dividends. What is the carrying amount of the investment in associate on December 31, 20x2? of a. 550,000 b. 590,000 c. 600,000 d. 640,000 PROBLEM 2: FOR CLASSROOM DISCUSSION 1. On January 1, 20x1, Entity A acquires 30% interest in Entity B for P600,000. Entity B reports profit of P200,000 and declares dividends of P50,000 in 20x1. How much is the carrying amount of the investment in associate on December 31, 20x1? a. 600,000 b. 660,000 c. 645,000 d. 630,000 2 Entity A uses the equity method in accounting for its 20% interest in Entity B. Entity B reports profit of P4M for the period. Entity B has outstanding 5% cumulative preference shares with an aggregate par value of P10M. Entity A holds none of the preference shares. Entity B did not declare dividends on the preference shares in the last three vears. including the current year. How much is Entity A's share in the profit of Entity B? r's a. 800,000 b. 700,000 c. 600,000 d. 500,000 3. Entity A acquires 20% interest in Entity B on September 1,

P200,000 and declares no dividends. What is the carrying amount of the investment in associate on December 31, 20x2? of a. 550,000 b. 590,000 c. 600,000 d. 640,000 PROBLEM 2: FOR CLASSROOM DISCUSSION 1. On January 1, 20x1, Entity A acquires 30% interest in Entity B for P600,000. Entity B reports profit of P200,000 and declares dividends of P50,000 in 20x1. How much is the carrying amount of the investment in associate on December 31, 20x1? a. 600,000 b. 660,000 c. 645,000 d. 630,000 2 Entity A uses the equity method in accounting for its 20% interest in Entity B. Entity B reports profit of P4M for the period. Entity B has outstanding 5% cumulative preference shares with an aggregate par value of P10M. Entity A holds none of the preference shares. Entity B did not declare dividends on the preference shares in the last three vears. including the current year. How much is Entity A's share in the profit of Entity B? r's a. 800,000 b. 700,000 c. 600,000 d. 500,000 3. Entity A acquires 20% interest in Entity B on September 1,

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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1. On January 1, 20x1, Entity A acquires 30% interest in Entity B d. Entity A should not apply the equity method. amount of the investment in associate on December 31, 20x2? interest in Entity B. Entity B reports profit of 94M for the amount of the investment in associate on December 31, 20x1? dividends of P50,000 in 20x1. How much is the carrying P200,000 and declares no dividends. What is the carrying 2. Entity A uses the equity method in accounting for its 20% period. Entity B has outstanding 5% cumulative preference for P600,000. Entity B reports profit of P200,000 and declares of P300,000 at year-end. In 20x2, Entity B reports loss of PAS 28 319 ned to exist a. 550,000 b. 590,000 c. 600,000 d. 640,000 vestee. vestee. avestee. stee's board c. 645,000 Under this ce is initially 600,000 a. d. 630,000 b. 660,000 ement e investor's nges in chares with an aggregate par value of P10M. Entity A holds none of the preference shares. Entity B did not declare dividends on the preference shares in the last three vears. including the current year. How much is Entity A's share in stor's share in equity he investor's anges in the profit of Entity B? a. 800,000 b. 700,000 c. 600,000 d. 500,000 3. Entity A acquires 20% interest in Entity B on September 1, 20x1. On November 30, 20x3, because of a short-fall in cash flows, Entity A sells one-half of the investment in Entity B. The remaining shares held do not give Entity A significant influence over Entity B. Entity A uses a calendar year accounting period. During what period should Entity A apply the equity method of PAS 28? Start a. Earliest period presented b. September 1, 20x1 C. January 1, 20xl ring decreases ociate or joint the investee tee March 31, 20 COx1, which was clares dividends Cease November 30, 20x3 November 30, 20x3 November 30, 20x3
Transcribed Image Text:1. On January 1, 20x1, Entity A acquires 30% interest in Entity B d. Entity A should not apply the equity method. amount of the investment in associate on December 31, 20x2? interest in Entity B. Entity B reports profit of 94M for the amount of the investment in associate on December 31, 20x1? dividends of P50,000 in 20x1. How much is the carrying P200,000 and declares no dividends. What is the carrying 2. Entity A uses the equity method in accounting for its 20% period. Entity B has outstanding 5% cumulative preference for P600,000. Entity B reports profit of P200,000 and declares of P300,000 at year-end. In 20x2, Entity B reports loss of PAS 28 319 ned to exist a. 550,000 b. 590,000 c. 600,000 d. 640,000 vestee. vestee. avestee. stee's board c. 645,000 Under this ce is initially 600,000 a. d. 630,000 b. 660,000 ement e investor's nges in chares with an aggregate par value of P10M. Entity A holds none of the preference shares. Entity B did not declare dividends on the preference shares in the last three vears. including the current year. How much is Entity A's share in stor's share in equity he investor's anges in the profit of Entity B? a. 800,000 b. 700,000 c. 600,000 d. 500,000 3. Entity A acquires 20% interest in Entity B on September 1, 20x1. On November 30, 20x3, because of a short-fall in cash flows, Entity A sells one-half of the investment in Entity B. The remaining shares held do not give Entity A significant influence over Entity B. Entity A uses a calendar year accounting period. During what period should Entity A apply the equity method of PAS 28? Start a. Earliest period presented b. September 1, 20x1 C. January 1, 20xl ring decreases ociate or joint the investee tee March 31, 20 COx1, which was clares dividends Cease November 30, 20x3 November 30, 20x3 November 30, 20x3
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