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What amount should Allapacan report as investment income for 2020?

What amount should Allapacan report as investment income for 2020?

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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Allapacan Company bought 20% of Amulung Corporation's ordinary shares on January 1, 2020 for P20,000,000. Carrying amount of Amulung's net assets at purchase date totaled P60,000,000. Fair value and carrying amounts were the same for all items except for plant and inventory, for which fair values exceed their carrying amounts by P15,000,000 and P5,000,000 respectively. The plant has a 5-year life. All inventory was sold during 2020. Goodwill, if any, has an indefinite life. During 2020, Amulung reported profit of P40,000,000 and paid P15,000,000 cash dividends. What amount should Allapacan report as investment income for 2020? O P6.400,000 O P7,600,000 O P3,400.0000 O P6,200.000
Transcribed Image Text:Allapacan Company bought 20% of Amulung Corporation's ordinary shares on January 1, 2020 for P20,000,000. Carrying amount of Amulung's net assets at purchase date totaled P60,000,000. Fair value and carrying amounts were the same for all items except for plant and inventory, for which fair values exceed their carrying amounts by P15,000,000 and P5,000,000 respectively. The plant has a 5-year life. All inventory was sold during 2020. Goodwill, if any, has an indefinite life. During 2020, Amulung reported profit of P40,000,000 and paid P15,000,000 cash dividends. What amount should Allapacan report as investment income for 2020? O P6.400,000 O P7,600,000 O P3,400.0000 O P6,200.000
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