The balance of Prime’s Investment in Sands account at December 31, 20x5 is:   P105,000 P138,600 P159,000 P165,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Prime Industries acquired an 80 percent interest in Sands Company by purchasing 24,000 of its 30,000 outstanding shares of common stock at book value of P105,000 on January 1, 20x4. Sands reported net income in 20x4 of P45,000 and in 20x5 of P60,000 earned evenly throughout the respective years. Prime received P12,000 dividends from Sands in 20x4 and P18,000 in 20x5. Prime uses the equity method to record its investment.
The balance of Prime’s Investment in Sands account at December 31, 20x5 is:
 
  • P105,000
  • P138,600
  • P159,000
  • P165,000
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