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How much is the carrying value of the investment on December

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Question - On June 1, 2020, Straw Company acquired 20% equivalent to 20,000 shares of Berry Company for P3,000,000 when Berry's net assets had carrying values of P12,000,000. Except for Land whose fair value is P500,000 higher than its book value, an Equipment (with 5 years remaining life from the date of acquisition) whose fair value exceeds its carrying values by P600,000, and Inventories with a book value of P4,500,000 and fair value of P4,700,000. All other identifiable assets and liabilities show carrying values equal to their fair values.

On December 31, 2020, 20% of the inventories remained unsold. Berry reported a total Net Income of 5,400,000 and Other Comprehensive Income in a form of Unrealized Gain-FVOCI amounting to 200,000. Straw received from Berry a total cash dividend of P540,000. Fair value of the shares at year-end is P140 per share.

Required - How much is the carrying value of the investment on December 31, 2020?

Reference no: EM133133710

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