Reference no: EM132620874

The following transactions pertain to High Company:

1. Purchased 20,000 ordinary shares of P100 par of Art Company for P2,000,000 on January 1, 2016. This purchase represents 20% interest in the net assets of Art. The shares give High Company significant influence over Art Company.

2. Art reported profit of P1,200,000 for 2016.

3. Fair market value per share on December 31, 2016 was P105.

4. In 2017, High received additional shares as a result of a 2-for-1 share split.

5. Art reported profit of P2,700,000 for 2017.

6. Art paid a cash dividend of P1,000,000 on the ordinary shares at December 31, 2017.

7. Fair market value per share on December 31, 2017 was P85.

8. High Company sold one-half of its investment on March 30, 2018 for P90 per share. Remaining shares were designated as financial assets at fair value through other comprehensive income.

9. Art reported profit of P3,000,000 for 2018.

10. Fair market value per share on December 31, 2018 was P58.

Required: Compute for the following:

Problem a) Compute for the amount to be reported in the 2018 profit or loss

Problem b) Carrying amount of the investment at December 31, 2018

Problem c) Carrying amount of the investment at December 31, 2017