On January 1, 2021, Entity F acquired 25% of the shares of Pot, Inc. for P425,000. At this date all identifiable assets and liabilities of Pot, Inc. were recorded at amounts equal to fair value, and the equality of Pot consisted of the following: Share capital P1,000,000 General reserve P300,000 Asset revaluation surplus P200,000 Retained earnings P200,000 In 2021, Pot reported profit of P250,000. P50,000 of the asset revaluation surplus was realized in 2021. Pot paid P40,000 divedend and transferred P30,000 to general reserve. What is the carrying amount of the investment in Pot, Inc. as of December 31,2021? a. P465,000 b. P477,000 c. P482,500 d. P490,000
On January 1, 2021, Entity F acquired 25% of the shares of Pot, Inc. for P425,000. At this date all identifiable assets and liabilities of Pot, Inc. were recorded at amounts equal to fair value, and the equality of Pot consisted of the following: Share capital P1,000,000 General reserve P300,000 Asset revaluation surplus P200,000 Retained earnings P200,000 In 2021, Pot reported profit of P250,000. P50,000 of the asset revaluation surplus was realized in 2021. Pot paid P40,000 divedend and transferred P30,000 to general reserve. What is the carrying amount of the investment in Pot, Inc. as of December 31,2021? a. P465,000 b. P477,000 c. P482,500 d. P490,000
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 14RE
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On January 1, 2021, Entity F acquired 25% of the shares of Pot, Inc. for P425,000. At this date all identifiable assets and liabilities of Pot, Inc. were recorded at amounts equal to fair value, and the equality of Pot consisted of the following:
Share capital P1,000,000
General reserve P300,000
Asset revaluation surplus P200,000
In 2021, Pot reported profit of P250,000. P50,000 of the asset revaluation surplus was realized in 2021. Pot paid P40,000 divedend and transferred P30,000 to general reserve.
What is the carrying amount of the investment in Pot, Inc. as of December 31,2021?
a. P465,000
b. P477,000
c. P482,500
d. P490,000
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