The carrying value of investment in King Inc. shares in 2019 is? 2. How much should be reported another comprehensive income/loss in the statement of comprehensive income for 2019 in relation to the investments? Thank you! Please answer complete
The carrying value of investment in King Inc. shares in 2019 is? 2. How much should be reported another comprehensive income/loss in the statement of comprehensive income for 2019 in relation to the investments? Thank you! Please answer complete
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
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Required:
1. The carrying value of investment in King Inc. shares in 2019 is?
2. How much should be reported another comprehensive income/loss in the statement of comprehensive income for 2019 in relation to the investments?
Thank you! Please answer complete
Transcribed Image Text:Problem 1:
Prince Inc. acquired 100,000 ordinary shares of Queen Corp. for Php 5 per share and 250,000 ordinary shares
of King Inc. for Php 10 per share on January 2, 2018. Both Queen Corp. and King Inc. have 1,000,00 ordinary
shares outstanding. The book values of the net assets of Queen Corp. and King Inc. on the acquisition date
were Php 4,500,000 and Php 9,000,000, respectively. The fair values of the net assets of both Queen Corp.
and King Inc. approximated their book values on the acquisition date, except for one of King's depreciable
asset having a remaining life of 5 years, which was understated by Php 500,000.
Both securities are being held as long term investments. Your investigation revealed the following changes in
Retained Earnings of Queen Corp. ad King Inc. for 2018 and 2019 based on their respective audited financial
statements:
Queen Corp.
King Inc.
(350,000)
Retained Earnings (Deficit) 1/1/18
Cash Dividends, 2018
2,000,000
(250,000)
Profit for 2018
400,000
650,000
Retained Earnings 12/31/2018
Cash Dividends, 2019
Profit for 2019
2,150,000
300,000
(300,000)
(100,000)
600,000
250,000
Retained Earnings, 12/31/2019
2,450,000
450,000
Market values of shares: 12/31/2018
Market values of shares: 12/31/2019
Php 7.00 per sh
Php 6.50 per sh
Php 12.00 per sh
Php 15.00 per sh
Required:
1. The carrying value of investment in King Inc. shares in 2019 is?
2. How much should be reported another comprehensive income/loss in the statement of
comprehensive income for 2019 in relation to the investments?
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