O. On July 1, 2020, Jude Company purchased 10,000 shares of Rigby Company ordinary shares for P510,000 plus broker's fees of P5,100. The shares represented 25% of the outstanding shares of Rigby and Jude has an ability to exercise significant influence over the financial and operating policies of Rigby. The acquisition cost reflected book value of the investee's net assets as of that date. Rigby Company reported profit of PS50,000 (evenly earned) for the year ended December 31, 2020. At December 31, 2020, Rigby declared and paid cash dividends of P320,000. At January 1, 2021, Jude Company sold one-half of the investment in Rigby for P275,000 less broker's fees of P2,750. Jude Company does not have the intention to dispose the remaining securities in the immediate future. For the year ended December 31, 2021, Rigby Company reported profit of P980,000 and declared and paid cash dividends of P150.000
O. On July 1, 2020, Jude Company purchased 10,000 shares of Rigby Company ordinary shares for P510,000 plus broker's fees of P5,100. The shares represented 25% of the outstanding shares of Rigby and Jude has an ability to exercise significant influence over the financial and operating policies of Rigby. The acquisition cost reflected book value of the investee's net assets as of that date. Rigby Company reported profit of PS50,000 (evenly earned) for the year ended December 31, 2020. At December 31, 2020, Rigby declared and paid cash dividends of P320,000. At January 1, 2021, Jude Company sold one-half of the investment in Rigby for P275,000 less broker's fees of P2,750. Jude Company does not have the intention to dispose the remaining securities in the immediate future. For the year ended December 31, 2021, Rigby Company reported profit of P980,000 and declared and paid cash dividends of P150.000
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 19E
Related questions
Question
- How much was the investment acquisition cost at July 1, 2020?
A.P515,100
B. P510,000
C. P509,400
D. P504,900
- What is the investment carrying amount at December 31, 2020?
A. P647,600
B. P550,000
C. P541,350
D. P536,250
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