Parent Corp bought 100% of Sub Co. on January 1, Year 1, for $5,000,000. Annual amortization of $30,000 resulted from this acquisition. Sub Co. reported a net income of $400,000 in Year 1 and paid $150,000 in dividends. What is the Investment in Sub Co. balance on Parent's books as of December 31, Year 1, if the equity method has been applied? a. $5,000,000 b. $5,220,000 c. $5,400,000 d. $5,370,000
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- On January 2, 2025, Cullumber Company purchased 20% of the outstanding common stock of Blossom, Inc. and subsequently used the equity method to account for the investment. During 2025, Blossom reported net income of $1380000 and distributed dividends of $600000. The ending balance in the Investment in Cullumber account at December 31, 2025 was $1020000 after applying the equity method during 2025. What purchase price did Cullumber pay for its investment in Blossom, Inc.? O $1176000 O $624000 O $1416000 O $864000On October 1, 2020, Beondegi Company purchased as debt investments at fair value through profit or loss, P100,000, 14% bonds of Samjang Company for 99 plus accrued interest and broker’s fees. Interest is paid semi-annually on February 1 and August 1. Broker’s fees incident to this purchase amounted to P500. How much was the total cash payment in the acquisition of the debt investments on October 1, 2020?The balance of the investment account at December 31,2021 is: a. P5,924,000b. P5,000,000c. P5,744,000d. P7,660,000
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