January 1, 2021, Arneyow Company acquired 10% of the outstanding voting shares of Pee Yu Pi Incorporated for P900,000. These shares were designated as equity investments at fair value through other comprehensive income. On January 1, 2022, Arneyow gained the ability to exercise significant influence over financial and operating policies of Pee Yu Pi by acquiring additional 20% of the outstanding shares for P2,760,000. The two purchases were made at prices proportionate to the value assigned to Pee Yu Pi's net assets, which is equal to their carrying amounts. For the years ended December 31, 2021 and 2022, Pee Yu Pi reported the following: 2021 2022 Dividends paid P2,000,000 P3,000,000 Profit for the year P 6,000,000 P 6,500,000 The fair values of the investments on December 31, 2021 and 2022 were P1,380,000 and P5,160,000, respectively. The carrying value of the investment in associate at the end of 2022 is?
January 1, 2021, Arneyow Company acquired 10% of the outstanding voting shares of Pee Yu Pi Incorporated for P900,000. These shares were designated as equity investments at fair value through other comprehensive income. On January 1, 2022, Arneyow gained the ability to exercise significant influence over financial and operating policies of Pee Yu Pi by acquiring additional 20% of the outstanding shares for P2,760,000. The two purchases were made at prices proportionate to the value assigned to Pee Yu Pi's net assets, which is equal to their carrying amounts. For the years ended December 31, 2021 and 2022, Pee Yu Pi reported the following: 2021 2022 Dividends paid P2,000,000 P3,000,000 Profit for the year P 6,000,000 P 6,500,000 The fair values of the investments on December 31, 2021 and 2022 were P1,380,000 and P5,160,000, respectively. The carrying value of the investment in associate at the end of 2022 is?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 8MC
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On January 1, 2021, Arneyow Company acquired 10% of the outstanding voting shares of Pee Yu Pi Incorporated for P900,000. These shares were designated as equity investments at fair value through other comprehensive income.
On January 1, 2022, Arneyow gained the ability to exercise significant influence over financial and operating policies of Pee Yu Pi by acquiring additional 20% of the outstanding shares for P2,760,000. The two purchases were made at prices proportionate to the value assigned to Pee Yu Pi's net assets, which is equal to their carrying amounts. For the years ended December 31, 2021 and 2022, Pee Yu Pi reported the following:
2021
2022
Dividends paid
P2,000,000
P3,000,000
Profit for the year
P 6,000,000
P 6,500,000
The fair values of the investments on December 31, 2021 and 2022 were P1,380,000 and P5,160,000, respectively.
The carrying value of the investment in associate at the end of 2022 is?
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