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Compute the share in profit or loss and investment income

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Problem - On January 1, 20x1, Abet Co purchased 25% interest I the ordinary share of XYZ for P2,000,000. XYZ's assets and liabilities approximate their fair values except for inventories with carrying amount of P500,000 and fair value of P100,000 and depreciate asset with carrying amount of P3,000,000 and fair value of P5,000,000. The remaining useful life of the depreciable asset is 10 years. XYZ's net assets has a book value of P5,000,0000.

Required -

a. Compute the share in profit or loss/investment income on 31 December 20x1?

b. Compute the carrying amount of investment on 31 December 20x1?

Reference no: EM132788457

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