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Determine the balance of alpha investment in b

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Reference no: EM132892379

Alpha Company acquired 20,000 shares of B Company on 1 January 2014 at P12 per share. B Company had 80,000 shares outstanding with a book value of P 800,000. The difference between the book value and the fair value of B Company as of 1 January 2014, is attributable to a broadcast license intangible asset. B Company recorded earnings of P360,000 and P390,000 for 2014 and 2015, respectively, and paid per share dividends of P 1.60 per share in 2014 and P 2.00 in 2015. Assume a 20-year straight-line amortization policy for the broadcast license.

Required:

Question (1) Give the entries to record the purchase in 2014 and reflect Alpha's share of B's earnings and receipt of dividends for 2014 and 2015.

Question (2) Determine the balance of Alpha's Investment in B as of 31 December 2014 and 31 December 2015.

Question (3) Reconcile B Company's stockholders' equity with Alpha's Investment in Beta as of 31 December 2014 and 31 December 2015.

Reference no: EM132892379

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