Problem 17-4 (IAA) At the beginning of current year, Disgust Company purchased 30,000 shares of an investee's 200,000 outstanding ordinary shares for P6,000,000. On that date, the carrying amount of the acquired shares was P4,000,000. The entity attributed the excess of cost over carrying amount to patent with remaining useful life of 10 years. During the year, Disgust Company's officers gained a majority on the investee's board of directors. The investee reported earnings of P5,000,000 for the year and paid dividend of P3,000,000 at year-end. Required: 1. Prepare journal entries to record the transactions for the curient year. 2. Compute the investment income for the current year. 3. Compute the carrying amount of the investment at year-end.

Problem 17-4 (IAA) At the beginning of current year, Disgust Company purchased 30,000 shares of an investee's 200,000 outstanding ordinary shares for P6,000,000. On that date, the carrying amount of the acquired shares was P4,000,000. The entity attributed the excess of cost over carrying amount to patent with remaining useful life of 10 years. During the year, Disgust Company's officers gained a majority on the investee's board of directors. The investee reported earnings of P5,000,000 for the year and paid dividend of P3,000,000 at year-end. Required: 1. Prepare journal entries to record the transactions for the curient year. 2. Compute the investment income for the current year. 3. Compute the carrying amount of the investment at year-end.

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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