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Determine the amount to be recognized

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Question - On July 1, 2016, TY Company acquired 25% of the shares of WY CO., for P10,000,000. At the date, the equity of WY was P40,000,000, with all identifiable assets and liabilities being measures at amount equal to fair value. The table shows the profits and the losses by WY during 2016 to 2020:

Year Profit (Loss)

2016 P2,000,000

2017 (20,000,000)

2018 (25,000,000)

2019 1,600,000

2020 3,000,000

Required - Based on the above and results of your audit, determine the following:

1. Determine the carrying amount of the investment in WY Co. as of December 31, 2017.

2. Determine the amount to be recognized in 2018 profit or loss related to the Investment in WY Co.

3. Determine the amount to be recognized in 2019 profit or loss related to the Investment in WY Co.

4. Determine the amount to be recognized in 2020 profit or loss related to the Investment in WY Co.

5. Determine the carrying amount of the investment in WY Co. as of December 31, 2020.

Reference no: EM133169188

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