(B) On Jan. 1, 2020, ABC purchased 30% of the outstanding shares of an investee for P7,500,000. As of this date, the investee has an equipment recorded at P2,000,000 less than its fair value. The
(B) On Jan. 1, 2020, ABC purchased 30% of the outstanding shares of an investee for P7,500,000. As of this date, the investee has an equipment recorded at P2,000,000 less than its fair value. The
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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Transcribed Image Text:(B) On Jan. 1, 2020, ABC purchased
30% of the outstanding shares of
an investee for P7,500,000. As of
this date, the investee has an
equipment recorded at P2,000,000
less than its fair value. The
equipment was bought exactly two
years ago and originally has a total
useful life of 10 years. For the year,
the investee reported net income
of P3,000,00O, actuarial gains of
P500,000, unrealized holding loss
of P300,000 through OCI, and
dividends declared and paid during
November of P2,000,000. For the
whole year, the equity of the
investee included P20,000,000 par
value from ordinary shares and
P10,000,000 par value from the
8%, noncumulative,
nonparticipating preference
shares. What should be reported as
the investment in associate as of
the end of the year? You may use
parenthetical solutions.
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