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The carrying value of investment in King Inc. shares in 2019 is? 2. How much should be reported another comprehensive income/loss in the statement of comprehensive income for 2019 in relation to the investments? Thank you! Please answer complete

The carrying value of investment in King Inc. shares in 2019 is? 2. How much should be reported another comprehensive income/loss in the statement of comprehensive income for 2019 in relation to the investments? Thank you! Please answer complete

FINANCIAL ACCOUNTING
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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Required: 1. The carrying value of investment in King Inc. shares in 2019 is? 2. How much should be reported another comprehensive income/loss in the statement of comprehensive income for 2019 in relation to the investments? Thank you! Please answer complete
Problem 1: Prince Inc. acquired 100,000 ordinary shares of Queen Corp. for Php 5 per share and 250,000 ordinary shares of King Inc. for Php 10 per share on January 2, 2018. Both Queen Corp. and King Inc. have 1,000,00 ordinary shares outstanding. The book values of the net assets of Queen Corp. and King Inc. on the acquisition date were Php 4,500,000 and Php 9,000,000, respectively. The fair values of the net assets of both Queen Corp. and King Inc. approximated their book values on the acquisition date, except for one of King's depreciable asset having a remaining life of 5 years, which was understated by Php 500,000. Both securities are being held as long term investments. Your investigation revealed the following changes in Retained Earnings of Queen Corp. ad King Inc. for 2018 and 2019 based on their respective audited financial statements: Queen Corp. King Inc. (350,000) Retained Earnings (Deficit) 1/1/18 Cash Dividends, 2018 2,000,000 (250,000) Profit for 2018 400,000 650,000 Retained Earnings 12/31/2018 Cash Dividends, 2019 Profit for 2019 2,150,000 300,000 (300,000) (100,000) 600,000 250,000 Retained Earnings, 12/31/2019 2,450,000 450,000 Market values of shares: 12/31/2018 Market values of shares: 12/31/2019 Php 7.00 per sh Php 6.50 per sh Php 12.00 per sh Php 15.00 per sh Required: 1. The carrying value of investment in King Inc. shares in 2019 is? 2. How much should be reported another comprehensive income/loss in the statement of comprehensive income for 2019 in relation to the investments?
Transcribed Image Text:Problem 1: Prince Inc. acquired 100,000 ordinary shares of Queen Corp. for Php 5 per share and 250,000 ordinary shares of King Inc. for Php 10 per share on January 2, 2018. Both Queen Corp. and King Inc. have 1,000,00 ordinary shares outstanding. The book values of the net assets of Queen Corp. and King Inc. on the acquisition date were Php 4,500,000 and Php 9,000,000, respectively. The fair values of the net assets of both Queen Corp. and King Inc. approximated their book values on the acquisition date, except for one of King's depreciable asset having a remaining life of 5 years, which was understated by Php 500,000. Both securities are being held as long term investments. Your investigation revealed the following changes in Retained Earnings of Queen Corp. ad King Inc. for 2018 and 2019 based on their respective audited financial statements: Queen Corp. King Inc. (350,000) Retained Earnings (Deficit) 1/1/18 Cash Dividends, 2018 2,000,000 (250,000) Profit for 2018 400,000 650,000 Retained Earnings 12/31/2018 Cash Dividends, 2019 Profit for 2019 2,150,000 300,000 (300,000) (100,000) 600,000 250,000 Retained Earnings, 12/31/2019 2,450,000 450,000 Market values of shares: 12/31/2018 Market values of shares: 12/31/2019 Php 7.00 per sh Php 6.50 per sh Php 12.00 per sh Php 15.00 per sh Required: 1. The carrying value of investment in King Inc. shares in 2019 is? 2. How much should be reported another comprehensive income/loss in the statement of comprehensive income for 2019 in relation to the investments?
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