Reference no: EM133121366
Question - How much is the investment income to be reported at the end of the current year?
At the beginning of current year, Courage Company acquired 25% of the outstanding shares of an investee at a total cost of P8,400,000. At the time, the carrying amount of the net assets of Courage Company totaled P28,800,000.
The investee owned equipment with 5-year remaining life and with a fair value P2,400,000 more than carrying amount. The investee owned land with a fair value of P1,200,000 more than carrying amount. During the current year, the investee sold the land.
At year-end, the investee reported net income of P6,000,000 declared and paid a cash dividend of P3,600,000 to shareholders at year-end. The fair value of the investment at year-end is P9,000,000.
Q1. How much is the investment income to be reported at the end of the current year?
Q2. How much is the carrying amount of the investment at year- end?
Q3. How much is the implied goodwill from acquisition?
Q4. What is the entry to record the excess of cost due to undervaluation of equipment for the current year?
Q5. What is the entry to record the receipt of cash dividend by Courage?
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