1. Choox Tv (CT) Company acquired 40% interest in an associate, Team Payaman (TP)Company, for P5,000,000 on January 1,2020.At the acquisition date, there were no differences between the fair value and carryingamount of identifiable assets and liabilities.TP Company reported the following net income and dividend for 2020 and 2021.20202021Net Income2,000,0003,000,000Dividend Paid800,0001,000,000The following transactions occurred between CT Company and TP Company:On January 1, 2020, TP Company sold an equipment costing P500,000 to CT company forP800,000. CT Company applied a 10% straight line method.On July 1, 2021, TP Company sold an equipment for P900,000 to CT Company. Thecarrying amount of the equipment is P500,000 at the time of sale.The remaining life of the equipment is 5 years and CT Company used the straight linedepreciation.On December 1, 2021, TP Company sold an inventory to CT Company for P2,800,000.The inventory had a cost of P2,000,000 and was still on hand on December 31, 2021.Requirement:a. What is the investor's share in the profit of the associate for 2020 and 2021?b. What is the carrying amount of the investment in associate on December 31, 2020and December 31, 2021?

Step 1 Investment in associate when investment in another entity holding its equity from 20% to 50%.

Requirement: a. What is the investor's share in the profit of the associate for 2020 and 2021? b. What is the carrying amount of the investment in associate on December 31, 2020 and December 31, 2021?

Requirement: a. What is the investor's share in the profit of the associate for 2020 and 2021? b. What is the carrying amount of the investment in associate on December 31, 2020 and 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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Concept explainers

Employee Benefits

In an organization employees are the most important resource and most important asset. They can lead an organization to the sky or can be the reason for unsuccessful of business. Therefore, it is very much important that employees of an organization should be satisfied by the environment of the organization and most importantly with the salary, wages incentives, etc.

Question

1. Choox Tv (CT) Company acquired 40% interest in an associate, Team Payaman (TP)
Company, for P5,000,000 on January 1,2020.
At the acquisition date, there were no differences between the fair value and carrying
amount of identifiable assets and liabilities.
TP Company reported the following net income and dividend for 2020 and 2021.
2020
2021
Net Income
2,000,000
3,000,000
Dividend Paid
800,000
1,000,000
The following transactions occurred between CT Company and TP Company:
On January 1, 2020, TP Company sold an equipment costing P500,000 to CT company for
P800,000. CT Company applied a 10% straight line method.
On July 1, 2021, TP Company sold an equipment for P900,000 to CT Company. The
carrying amount of the equipment is P500,000 at the time of sale.
The remaining life of the equipment is 5 years and CT Company used the straight line
depreciation.
On December 1, 2021, TP Company sold an inventory to CT Company for P2,800,000.
The inventory had a cost of P2,000,000 and was still on hand on December 31, 2021.
Requirement:
a. What is the investor's share in the profit of the associate for 2020 and 2021?
b. What is the carrying amount of the investment in associate on December 31, 2020
and December 31, 2021?

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