Determine the impairment loss recognized by QQQ

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Question - On January 1, 20X2, SME QQQ acquired a 30% equity of BBB for P 80,000. The transaction cost paid by QQQ was P 4,000. QQQ has controlled over BBB entity. Joint Venture are considered as medium-sized entities On December 31, 20X2 BBB declared and paid dividends of P15,000 and reported a net income of P60,000 for that year. Using appropriate valuation techniques QQQ determined the fair value of the investment in BBB at the year-end as P96,000. Cost to sell are estimated at 8% of the fair value of the investment.

Required -

1. Determine the impairment loss recognized by QQQ at December 31, 20X2 in reporting the investment on the balance sheet, using the equity model.

2. Determine the net profit or (loss) to be presented by QQQ. In the income statement for 20X2 using the fair value model.

3. Determine the amount of the investment to be presented on the balance sheet at December 31, 20X2 using the cost model.

Reference no: EM132813852

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