On January 1 2019, an entity purchased 40% of the outstanding ordinary shares of another entity for 5,000,000 when the net assets of the investee amounted to 10,000,000. At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to fair value, except for land whose the fair value was 2,000,000 greater than carrying amount and inventory whose fair value was 1,500,000 greater than cost. The land was sold in 2019 and one-half of the inventory was sold during 2019 . During 2019, the investee reported net income of 8,000,000, issued 10% share dividend and paid cash dividend of 2,500,000. What is the investment income for 2019? a. 3,200,000 b. 2,100,000 c. 2,500,000 d. 3,300,000 What is the carrying amount of the investment on December 31,2019? a. 6,500,000 b. 6,100,000 c. 7,200,000 d. 7,300,000
On January 1 2019, an entity purchased 40% of the outstanding ordinary shares of another entity for 5,000,000 when the net assets of the investee amounted to 10,000,000.
At acquisition date, the carrying amounts of the identifiable assets and liabilities of the investee were equal to fair value, except for land whose the fair value was 2,000,000 greater than carrying amount and inventory whose fair value was 1,500,000 greater than cost.
The land was sold in 2019 and one-half of the inventory was sold during 2019 .
During 2019, the investee reported net income of 8,000,000, issued 10% share dividend and paid cash dividend of 2,500,000.
What is the investment income for 2019?
a. 3,200,000
b. 2,100,000
c. 2,500,000
d. 3,300,000
What is the carrying amount of the investment on December 31,2019?
a. 6,500,000
b. 6,100,000
c. 7,200,000
d. 7,300,000
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