Problem 17-3 (IFRS)P1,700,000 on January 1, 2020.The shareholders' equity of Film Company on January 1 andDecember 31, 2020 is as follows:January 1 December 313,000,0001,300,0001,500,0003,000,000Share capitalRevaluation surplusRetained earnings1,000,000On January 1, 2020, all the identifiable assets and liabilities ofFilm Company were recorded at fair value.Film Company reported profit of P650,000, after income taxexpense of P350,000 and paid dividends of P150,000 toshareholders during the current year.The revaluation surplus is the result of the revaluation of landrecognized by Film Company on December 31, 2020.Additionally, depreciation is provided by Film Company on thediminishing balance method whereas Czar Company uses thestraight-line.Had Film Company used the straight line, the accumulateddepreciation would be increased by P200,000. The tax rate is30%.Required:1. Prepare journal entries for the current year to recognizethe transactions relating to the investment in associate.2. Determine the carrying amount of the investment inassociate on December 31, 2020.484Mar 24, 2021

Investment-: Investment refers to Investing sum amount or anything to increase its present value in…

Problem 17-3 (IFRS) Czar Company acquired a 40% interest in Film Company for P1,700,000 on January 1, 2020. The shareholders' equity of Film Company on January 1 and December 31, 2020 is as follows: January 1 December 31 3,000,000 3,000,000

Problem 17-3 (IFRS) Czar Company acquired a 40% interest in Film Company for P1,700,000 on January 1, 2020. The shareholders' equity of Film Company on January 1 and December 31, 2020 is as follows: January 1 December 31 3,000,000 3,000,000

FINANCIAL ACCOUNTING

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ISBN:9781259964947

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Chapter1: Financial Statements And Business Decisions

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Consolidation

Consolidation in general examination implies an asset oscillating between well-defined methods of trading status. Consolidation is commonly known as market indecisiveness, which completes when the asset's values move forward or backward the trading structure.

Question

Problem 17-3 (IFRS)
P1,700,000 on January 1, 2020.
The shareholders' equity of Film Company on January 1 and
December 31, 2020 is as follows:
January 1 December 31
3,000,000
1,300,000
1,500,000
3,000,000
Share capital
Revaluation surplus
Retained earnings
1,000,000
On January 1, 2020, all the identifiable assets and liabilities of
Film Company were recorded at fair value.
Film Company reported profit of P650,000, after income tax
expense of P350,000 and paid dividends of P150,000 to
shareholders during the current year.
The revaluation surplus is the result of the revaluation of land
recognized by Film Company on December 31, 2020.
Additionally, depreciation is provided by Film Company on the
diminishing balance method whereas Czar Company uses the
straight-line.
Had Film Company used the straight line, the accumulated
depreciation would be increased by P200,000. The tax rate is
30%.
Required:
1. Prepare journal entries for the current year to recognize
the transactions relating to the investment in associate.
2. Determine the carrying amount of the investment in
associate on December 31, 2020.
484
Mar 24, 2021

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