9.On January 1, 2021, White Company acquired 25,000 shares of Black Company for P900,000. Black has 100,000 total outstanding shares. Black’s assets and liabilities approximate their fair values. In 2021, Black reported profit of P2,000,000, declared and paid cash dividends of P600,000 and reported property revaluation decrease of P80,000. In its financial statements for the year ended December 31, 2021, how much should White Company report as share in the associate’s profit and investment in associate, respectively?
9.On January 1, 2021, White Company acquired 25,000 shares of Black Company for P900,000. Black has 100,000 total outstanding shares. Black’s assets and liabilities approximate their fair values. In 2021, Black reported profit of P2,000,000, declared and paid cash dividends of P600,000 and reported property revaluation decrease of P80,000. In its financial statements for the year ended December 31, 2021, how much should White Company report as share in the associate’s profit and investment in associate, respectively?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
ChapterA2: Investments
Section: Chapter Questions
Problem 25E
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9.On January 1, 2021, White Company acquired 25,000 shares of Black Company for P900,000. Black has 100,000 total outstanding shares. Black’s assets and liabilities approximate their fair values. In 2021, Black reported profit of P2,000,000, declared and paid cash dividends of P600,000 and reported property revaluation decrease of P80,000. In its financial statements for the year ended December 31, 2021, how much should White Company report as share in the associate’s profit and investment in associate, respectively?
500,000 ; 1,170,000
500,000 ; 1,270,000
500,000 ; 1,230,000
500,000 ; 1,270,000
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