On January 1, 2013, Babe Company acquired a long term investment for P7,000,000, a 40% interest in Honey Company when the fair value of Honey’s net assets was P17,500,000. Honey Company reported the following net losses: 2013 5,000,000 2014 7,000,000 2015 8,000,000 2016 4,000,000 On January 1, 2015, Babe Company made cash advances of P2,000,000 to Honey Company. What amount should be reported in 2016 as loss on investment?
On January 1, 2013, Babe Company acquired a long term investment for P7,000,000, a 40% interest in Honey Company when the fair value of Honey’s net assets was P17,500,000. Honey Company reported the following net losses: 2013 5,000,000 2014 7,000,000 2015 8,000,000 2016 4,000,000 On January 1, 2015, Babe Company made cash advances of P2,000,000 to Honey Company. What amount should be reported in 2016 as loss on investment?
Financial Accounting
14th Edition
ISBN:9781305088436
Author:Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:Carl Warren, Jim Reeve, Jonathan Duchac
Chapter15: Investments And Fair Value Accounting
Section: Chapter Questions
Problem 1E: Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount....
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On January 1, 2013, Babe Company acquired a long term investment for
P7,000,000, a 40% interest in Honey Company when the fair value of Honey’s net assets was P17,500,000. Honey Company reported the following net losses:
2013 5,000,000
2014 7,000,000
2015 8,000,000
2016 4,000,000
On January 1, 2015, Babe Company made cash advances of P2,000,000 to
Honey Company. What amount should be reported in 2016 as loss on investment?
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