Ukelele Company paid PHP68 Million on January 2, 2021, for 4 million shares of Guitar Corporation ordinary shares.The investment represents a 25% interest in the assets of Guitar and gave Ukelele the ability to exercise significant influenceover Guitar Corporation. On the date of acquisition the following data are available:a. The book value of Guitar Corporation's Net Assets was P192 Million.b. The fair value of Guitar Corporation's depreciable assets exceeded their book value by 32 million. These assets had anaverage remaining usefule life of eight years.c. The remainder of the excess of the cost of the investment over the book value of net assets purchased was attributableto goodwill.Guitar Corp paid P1.5 per share dividends on August 25, 2021. Guitar reported net income of P40 Million for the year endedDecember 31, 2021. The market value of Guitar's ordinary shares at December 31, 2021 was P18.5 per share.Required:1. Prepare all appropriate journal entries related to the investment during 2021.2. Compute for the investment income and carrying amount of the investment in associate as of December 31, 2021.

Step 1 An Associate is a company in which an investor can exercise significant influence i.e. 20% to…

Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. Compute for the investment income and carrying amount of the investment in associate as of December 31, 2021.

Required: 1. Prepare all appropriate journal entries related to the investment during 2021. 2. Compute for the investment income and carrying amount of the investment in associate as of December 31, 2021.

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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