How much should be investment income of yoona corporation

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On July 1, 2020, Yoona Corporation obtained 20% of the outstanding ordinary shares of another entity for $5,000,000 which has a carrying amount of $4,000,000. The excess of cost over the carrying amount was attributable to an identifiable intangible asset which was undervalued on the investee's statement of financial position and which had a remaining useful life of 5 years. The investee reported a net income of $6,000,000 for 2020 and paid cash dividends of $1,000,000 on ordinary shares and issued 10% stock dividend on December 31, 2020.

Problem a. How much should be the investment income of Yoona Corporation for 2020?

Problem b. How much is the carrying amount of the investment in associate to be recorded on December 31, 2020?

Reference no: EM132858855

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