Reference no: EM132788436
Tomato CO. purchased 40% of MU Corp. on April 1,2017, for P500,000 when MU's book value was 1,260,000. On the date of acquisition, the market value of MU's net assets equaled their book values except for the following:
- MU's equipment has a fair value of P50,00 less than its book value. The equipment has a remaining useful life of 10 years.
- MU's building has a fair value of 40,000 more than its book value. The building has a remaining useful life of 20 years.
MU's results of operation in 2017 and 2018 are as follows:
2017 NET INCOME P 150,000
2018 NET LOSS OF P30,000
MU paid cash dividends of P20,000 and P10,000 in 2017 and 2018, respectively,
REQUIRED:
Problem a: Journal entries and the following balances:
1. Investment income dec. 31,2017
2. Investment loss 2018
3. Investment carrying value for 2017 and 2018
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