On January 1, 2021, Brianne Company acquired 30% of the voting share capital of another entity for P5,000,000 which was equal to the book value of interest acquired. The investee reported net income of P4,000,000 for 2021 and P6,000,000 for 2022 but paid no dividends during the two-year period. On July 1, 2022, Brianne Company sold half of the investment for P4,500,000. The fair value of the retained investment was P4,800,000 on July 1, 2022, and P5,500,000 on December 31, 2022. The retained investment is to be held at FVTOCI. 9. What is the gain on sale of investment that should be reported in 2022 income statement?
On January 1, 2021, Brianne Company acquired 30% of the voting share capital of another entity for P5,000,000 which was equal to the book value of interest acquired. The investee reported net income of P4,000,000 for 2021 and P6,000,000 for 2022 but paid no dividends during the two-year period. On July 1, 2022, Brianne Company sold half of the investment for P4,500,000. The fair value of the retained investment was P4,800,000 on July 1, 2022, and P5,500,000 on December 31, 2022. The retained investment is to be held at FVTOCI. 9. What is the gain on sale of investment that should be reported in 2022 income statement?
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
Related questions
Question
On January 1, 2021, Brianne Company acquired 30% of the voting share capital of another entity for
P5,000,000 which was equal to the book value of interest acquired. The investee reported net income
of P4,000,000 for 2021 and P6,000,000 for 2022 but paid no dividends during the two-year period. On
July 1, 2022, Brianne Company sold half of the investment for P4,500,000. The fair value of the
retained investment was P4,800,000 on July 1, 2022, and P5,500,000 on December 31, 2022. The
retained investment is to be held at FVTOCI.
9. What is the gain on sale of investment that should be reported in 2022 income statement?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L…
Accounting
ISBN:
9781337619455
Author:
Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:
Cengage Learning